Exhibit 10.22

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of April 29, 2008,
by and between BioForm Medical, Inc., a Delaware corporation (“Buyer” or
“BioForm”) and Advanced Cosmetic Intervention, Inc., a Colorado corporation
(“Seller” or “ACI”). ACI and BioForm may be referred to herein individually as a
“Party” and collectively as the “Parties”. Certain other capitalized terms used
in this Agreement are defined in Section 1.

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to
BioForm, substantially all of the assets of Seller, including those assets
related to the business of selling nerve ablation devices;

WHEREAS, Seller has entered into a license agreement with JNJ Technology
Holdings, LLC, a Colorado limited liability company (“JNJ”) under which JNJ
granted to Seller a license under certain Intellectual Property Rights owned by
JNJ;

WHEREAS, on even date herewith, Buyer and JNJ will enter into the JNJ APA (as
defined below) whereby Buyer will purchase from JNJ substantially all of JNJ’s
assets, including those intellectual property rights currently licensed to
Seller;

WHEREAS, the individual principals of JNJ are also significant shareholders of
Seller;

WHEREAS, Advanced Headache Intervention, Inc., a Colorado Corporation (“AHI”) is
an entity that was spun off from Seller to commercialize nerve ablation devices
in the field of pain management; and

WHEREAS, Buyer and Seller intend that Buyer will negotiate an agreement with AHI
following the Closing with respect to selling nerve ablation devices in the
field of pain management.

NOW THEREFORE, in consideration of the terms, covenants, and conditions
hereinafter set forth, the Parties hereto agree as follows:

1. Definitions. For the purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings set forth below
and grammatical variations of such terms shall have corresponding meanings:

1.1 “Affiliate” means, with respect to any person, any person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such person. For the purposes of this definition,
“control” means the direct or indirect ownership of more than fifty percent
(50%) of the outstanding shares or other voting rights entitled to vote for the
election of directors (or in the case of an entity that is not a corporation,
for the election of the corresponding management authority). Seller shall not be
deemed for any purposes of this Agreement to be an Affiliate of Buyer. Neither
JNJ nor AHI shall be deemed for any purpose of this Agreement to be an Affiliate
of Seller.

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1.2 “AHI” has the meaning given to it in the recitals.

1.3 “AHI Field” means the applications and indications for which Net Sales of
Products will result in a royalty being due to AHI under any agreement entered
into between Buyer and AHI after Closing, as described in Section 8.3. The AHI
Field will not be broader than the treatment of pain manifested in the head. For
the avoidance of doubt, the AHI Field will not include applications for which
the primary purpose is aesthetic modification or therapeutic benefit other than
the treatment of pain manifested in the head, even if such application also has
an impact on pain manifested in the head. However, the AHI Field may include
applications for which the primary purpose is the treatment of pain manifested
in the head, even if such application also has an aesthetic impact.

1.4 “Ancillary Agreements” means the Escrow Agreement, the Bill of Sale, the
Assignment and Assumption Agreement, the Intellectual Property Assignments, and
all other ancillary agreements to this Agreement.

1.5 “Basket Amount” means $75,000.

1.6 “Books and Records” means all papers and records (in paper or electronic
format) including, without limitation, all (i) purchasing and sales records;
(ii) clinical study protocols, photographs, presentations, correspondence,
results and records; (iii) customer and distributor lists and files;
(iv) corporate, investor, legal, accounting and financial records, and marketing
and advertising documents and materials, including training materials and
videos; (v) government filings and registrations; (vi) notes, notebooks, project
plans, design history files, results, reports and data generated in connection
with research and development activities; (vii) manufacturing and quality
assurance methods, processes, procedures, audits, results, records, supplier
lists and files; (viii) regulatory correspondence and files not included in
Transferred Regulatory Approvals; and (ix) files related to the Transferred
Intellectual Property Rights, including files maintained by intellectual
property lawyers or agents, and copies of nondisclosure agreements signed by
employees and other Third Parties.

1.7 “Business” means the development, manufacture and sale of Seller Products,
either directly to customers or through distributors, licensees or other agents,
as currently conducted by Seller.

1.8 “Business Day” (whether such phrase is capitalized or not) means any day,
other than Saturday, Sunday, or a legal holiday in California, that banks
located in San Francisco, California are open for business.

1.9 “Calendar Quarter” means the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30, or December 31.

1.10 “Contract” or “Contracts” means any mortgage, indenture, lease, contract,
covenant, arrangement, agreement, instrument, commitment, purchase order or
license.

 

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1.11 “Documentation” means all documentation relating to any Product, including
without limitation marketing materials, maintenance manuals, manufacturing and
technical specifications, and documentation that accompanies the Product when
delivered to customers such as instructions, labeling, and training materials,
and web content and materials displayed or available on world wide web sites,
which relate to those Uniform Resource Locators, Web site addresses and domain
names listed on Schedule 2.1, and all copyrights and other Intellectual Property
Rights therein.

1.12 “Encumbrance” or “Encumbrances” means any encumbrance, lien, charge,
hypothecation, pledge, mortgage, adverse claim, option, preemptive right, or
other security interest of any nature, or any contract to create any of the
foregoing.

1.13 “Escrow Agent” means The Bank of New York.

1.14 “Escrow Agreement” means the escrow agreement by and among the Buyer,
Seller and the Escrow Agent in substantially the form of Exhibit A hereto.

1.15 “Exclusivity Payments” means $400,000, which Buyer paid to Seller prior to
the Closing Date as an advance on the Cash Consideration, in consideration for
Seller and JNJ’s covenant to enter into exclusive negotiations with Buyer.

1.16 “Existing JNJ-ACI License” means the Technology License Agreement dated as
of July 1, 2004 between JNJ and Seller, which will be terminated as of the
Closing Date as described herein.

1.17 “Fair Market Value” means the cash consideration that Buyer or its
Affiliate or Licensee would realize from an unaffiliated, unrelated buyer in an
arm’s length sale of an identical item sold in the same quantity, under the same
terms, and at the same time and place.

1.18 “Filed Intellectual Property Rights” means all United States, international
and foreign Intellectual Property Rights that are the subject of an application,
certificate, filing, registration or other document issued, filed with or
recorded by any court, administrative agency or commission or other federal,
state, county, local or foreign governmental authority, instrumentality, agency
or commission.

1.19 “First Commercial Sale” means the date when a Product has been sold by
Buyer or its Affiliate or Licensee in commerce and shipped to a customer and
such customer has been invoiced for the price of such Product.

1.20 “GAAP” means United States generally accepted accounting principles.

1.21 “Intellectual Property Rights” means all intangible proprietary rights of
any kind or nature throughout the world, including without limitation the
following and all statutory and/or common law rights in, arising out of, or
associated therewith: (i) all Patent Rights; (ii) all works of authorship,
copyrights, mask works, copyright and mask work registrations and applications,
copyrightable subject matter whether or not registration for any such copyright
exists or is pending, and all other copyright interests accruing by reason of
international copyright conventions pertaining thereto (“Copyrights”); (iii) all
Know-How; (iv) all industrial designs and any registrations and applications
therefor; (v) all trade names, logos, trademarks and service

 

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marks, trademark and service mark registrations and applications, and all other
interests accruing by reason of international trademark conventions and all
goodwill associated therewith (“Trademarks”); (vi) all databases and data
collections (including supplier or customer lists and supplier or customer
databases); (vii) all rights in Software; and (viii) rights to Uniform Resource
Locators, Web site addresses and domain names.

1.22 “JNJ” has the meaning given to it in the recitals.

1.23 “JNJ APA” means that certain Asset Purchase Agreement, in the form set
forth at Exhibit B, to be entered into between Buyer and JNJ on the Closing
Date.

1.24 “JNJ Purchased Assets” means all assets identified as “Purchased Assets” in
the JNJ APA.

1.25 “JNJ Transferred Intellectual Property Rights” means all assets identified
as “Transferred Intellectual Property Rights” in the JNJ APA.

1.26 “JNJ Transferred Patent Rights” means the “Transferred Patent Rights” as
identified in the JNJ APA.

1.27 “Key Executives” means each of Mike Janssen, James Newman, Jim Jones, Paul
Maroon, and David Stevens.

1.28 “Know-How” means all information, data, materials, technologies,
inventions, trade secrets, algorithms, concepts, system designs, engineering
models, ideas, software, discoveries, processes, standards, methods,
compositions, formulae, procedures, protocol techniques, results of
experimentation and testing, and other know-how, whether or not patentable or
copyrightable.

1.29 “Knowledge of Seller” or “Seller’s Knowledge” means the actual knowledge of
Paul Maroon, Mike Janssen, Stan Dunavant, Warren Bisbee, Dwight Zurawski, James
Newman, Jim Jones, and David Stevens; provided, however, that such person shall
have made reasonable inquiry of those employees and consultants of Seller who
would reasonably be expected to have knowledge of the matter in question;
provided further, however, that if any such person shall not make such
reasonable inquiry, then such person shall be deemed to have actual knowledge of
those facts or matters that such person would reasonably be expected to have had
such person made such inquiry.

1.30 “Licensee” means a Third Party (other than AHI) to whom Buyer has granted a
license under the JNJ Transferred Intellectual Property Rights and the
Transferred Intellectual Property Rights to make, use, offer to sell, sell, or
import Products in the Royalty Field, but this shall not cover sales made by
Buyer or its Affiliates or licensees to Third Party distributors.

1.31 “Material Adverse Effect on Buyer” means a circumstance, state of facts,
event, consequence or result that materially and adversely affects, or could
reasonably be expected to affect materially and adversely, the financial
condition or operating results of Buyer, or the ability of Buyer to consummate
the transactions which it is required to consummate under this Agreement and the
JNJ APA.

 

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1.32 “Material Adverse Effect on Seller” means a circumstance, state of facts,
event, consequence or result that materially and adversely affects, or could
reasonably be expected to affect materially and adversely, the Purchased Assets,
the JNJ Purchased Assets, Seller’s financial condition, or Seller’s operating
results, or the ability of Seller to consummate the transactions which it is
required to consummate under this Agreement.

1.33 “Net Sales” means the gross amount invoiced by Buyer, its Affiliates, and
its Licensees for sales of Products in the Royalty Field to Third Parties
(excluding sales by and between Buyer, its Affiliates, and its Licensees) less
the following:

(a) shipping, postage, freight, and transportation charges and other related
charges, such as insurance, directly chargeable to the sale of the Product;

(b) sales and excise taxes, customs duties, and other taxes, duties and
governmental charges (including any tax such as a value added or similar tax or
government charge) levied on the sale, transportation, delivery, or exportation
of the Product and actually paid by the seller, in accordance with GAAP, but
excluding any taxes and governmental charges calculated based on any profit or
income earned by Buyer or its Affiliates or Licensees;

(c) governmental charges imposed upon the sale, manufacture, or use of the
Products;

(d) distributor’s fees, rebates (including cash and non-cash rebates), returns,
and allowances;

(e) discounts (including trade, quantity, and cash discounts), charge-backs,
retroactive price reductions, refunds, returns, and billing errors;

(f) allowances and credits on account of governmental requirements, rejections,
recalls, defects, or returns; and

(g) other similar or customary deductions taken in the ordinary course of
business or in accordance with GAAP.

For clarity, use of the Products for promotional, sampling or compassionate use
purposes or for use in clinical trials shall not be considered in determining
Net Sales, in each case so long as (i) such Products are provided or sold at
less than the cost of goods; and (ii) the recipients do not resell the Products.
For purposes of this provision, compassionate use shall include any sales of
Products to non-profit organizations operated for charitable purposes, provided
that such sales meet the requirements of clauses (i) and (ii) of the preceding
sentence.

1.34 “Off the Shelf Software” means commercially available software licensed to
the Seller under generally available terms and conditions, other than software
included in or necessary to operate any Product.

 

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1.35 “Patent Rights” means all (i) issued patents; (ii) pending patent
applications and rights to file applications, including without limitation, all
provisional applications, substitutions, continuations, continuations-in-part,
divisions, re-examinations, national phase PCT applications, PCT international
applications, and all foreign counterparts; (iii) patents-of-addition, reissues,
renewals, revivals, reexamination certificates, and extensions and restorations
by existing or future extension or restoration mechanisms, including, without
limitation, supplementary protection certificates and the equivalent thereof;
(iv) inventor’s certificates; and (v) forms of government-issued rights
substantially similar to any of the foregoing throughout the world.

1.36 “Permitted Encumbrances” means (i) any lien for taxes that are not yet due
or are being contested in good faith, (ii) any carrier’s, warehouseman’s,
mechanic’s, materialman’s, repairman’s, landlord’s, lessor’s or similar
statutory lien incidental to the ordinary conduct of the Business, or (iii) any
municipal and zoning ordinance, recorded easement, covenant or restriction that
does not prohibit or materially interfere with the present use, or materially
affect the present value, of the Business or the Purchased Assets.

1.37 “Person” means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity, as well as any syndicate or
group of any of the foregoing.

1.38 “Product” means any radio frequency nerve ablation product that uses or
incorporates, or by the making, using or selling of which infringes, any
Transferred Intellectual Property Rights or JNJ Transferred Intellectual
Property Rights, including without limitation the Products described on Schedule
2.1.

1.39 “Royalty Field” means all applications and indications, other than the AHI
Field.

1.40 “Royalty Rate” means (i) [*] with respect to Net Sales of a Product in a
country in which, at the time of sale, there is a Valid Claim included within
the JNJ Transferred Patent Rights covering the manufacture, use, sale, offer for
sale, or importation of such Product in such country; or (ii) [*] with respect
to Net Sales of a Product in a country in which, at the time of sale, there is
no Valid Claim included within the JNJ Transferred Patent Rights covering the
manufacture, use, sale, offer for sale, or importation of such Product in such
country.

1.41 “Royalty Period” means, on a Product-by-Product and country-by-country
basis, the period of time beginning on the date of the First Commercial Sale of
a Product in a country and extending through and including the later of (i) the
date on which the last Valid Claim included within the JNJ Transferred Patent
Rights, which Valid Claim would be infringed by the manufacture, use, or sale of
the Product, ceases to be a Valid Claim (e.g., upon expiration, lapse,
disclaimer, a holding that such claim is invalid or unenforceable, the
abandonment or rejection of a pending application that includes such claim,
etc.) and (ii) December 31, 2029.

1.42 “Seller Payables” means any and all accounts payable, notes and other
amounts payable to creditors, customers and any other Persons arising from the
conduct of the Business by Seller before the Closing as shown in Section 3.4 to
the Disclosure Schedule, but excluding any Assumed Liabilities.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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1.43 “Seller Product” or “Seller Products” means any and all products of Seller
that use or incorporate any of the Transferred Intellectual Property Rights or
any JNJ Transferred Intellectual Property Rights, including any documentation
that accompanies such product when delivered to Seller’s customers such as
instructions, labeling and training materials.

1.44 “Seller Receivables” means any and all accounts receivable, notes and other
amounts receivable arising from the sale and delivery of Products or the
provision of services before the Closing Date.

1.45 “Software” means any and all computer software, in object code and source
code, and all underlying Intellectual Property Rights in connection therewith,
used in connection with the operation of the Business.

1.46 “Tangible Assets” means (i) all raw materials, works-in-process,
finished-goods inventories, packaging materials, brochures, graphics, and
artwork (in each case, in paper and electronic format) and UPC codes relating to
the Business; (ii) all prototypes, models (whether tangible or digital,
including ERP and CAD files), test devices, lab notebooks, and other materials
embodying any Transferred Intellectual Property Rights; (iii) all tools, jigs,
dies, and equipment relating to the Business; and (iv) all other tangible assets
relating to the Business.

1.47 “Tax” or “Taxes” means any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes as well
as public imposts, fees and social security charges (including but not limited
to health, unemployment and pension insurance), together with all interest,
penalties and additions imposed with respect to such amounts and any obligation
under any agreement or arrangement with any other Person with respect to such
amounts and including any liability for taxes of a predecessor entity.

1.48 “Third Part(y/ies)” means any Person(s) other than Buyer, Seller or their
respective Affiliates.

1.49 “Transferred Books and Records” means Books and Records of Seller related
to the Business; provided, however, that Transferred Books and Records shall not
include Seller’s corporate minute book, general ledger, tax returns, Books and
Records relating to Seller’s physical facilities, directors, officers,
shareholders, optionholders, financial and other accounting records necessary
for the preparation of financial statements, tax returns or government-required
filings, personnel records and other records that Seller is required by law to
retain in its possession (provided that to the extent consistent with law copies
of such personnel records shall be provided to Buyer) and other Books and
Records primarily related to Seller as a corporate entity.

1.50 “Transferred Contracts” means those Contracts listed on Schedule 2.1,
which, for purposes of clarification includes the Existing JNJ-ACI License which
is being transferred to Buyer by way of termination of such agreement pursuant
to the Termination Agreement and the execution of this Agreement and of the JNJ
APA between JNJ and Buyer.

 

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1.51 “Transferred Intellectual Property Rights” means all Intellectual Property
Rights owned or transferable by Seller, including without limitation the
Transferred Trademarks and other Intellectual Property Rights listed or
described on Schedule 2.1, but excluding the Excluded Assets.

1.52 “Transferred Regulatory Approvals” means the pending and/or granted
approvals and registrations that are owned or controlled by the Seller as of the
Closing for the investigation, manufacture, distribution, sale and/or marketing
of any Product (including without limitation any pending and/or cleared 510(k)
notifications or pre-marketing approvals (PMAs)) and can be transferred to Buyer
in accordance with the terms of this Agreement under applicable law, including
without limitation those items set forth on Schedule 2.1, and all supplements
and amendments thereto; and (ii) all dossiers, reports, data and other written
materials filed as part of such approvals or registrations, or maintained by the
Seller or its contractors and relating to such approvals or registrations.

1.53 “Transferred Trademarks” means all registered Trademarks, pending
applications for Trademark registrations, and common law Trademarks of Seller in
any jurisdiction in the world including without limitation the Trademarks listed
on Schedule 2.1.

1.54 “Valid Claim” means (a) any claim included in an issued and unexpired U.S.
or foreign patent that has not been held permanently revoked, unenforceable, or
invalid by a decision of a court or other governmental agency of competent
jurisdiction, and that has not been admitted to be invalid or unenforceable
through reissue, disclaimer, or otherwise; and (b) any claim included in a
pending U.S. or foreign patent application that was filed and is being
prosecuted in good faith and has not been abandoned or finally disallowed
without the possibility of appeal or re-filing of the application, provided that
such claim has not been pending for more than seven (7) years from the priority
date of such patent application.

2. Purchase and Sale of the Purchased Assets.

2.1 Purchased Assets. Subject to the terms and conditions of this Agreement,
Buyer hereby agrees to purchase from Seller, and Seller hereby agrees to sell,
convey, transfer and assign to Buyer, on the Closing Date (as defined in
Section 2.8), all of Seller’s right, title and interest in and to the following
assets, including without limitation all those assets described on Schedule 2.1
attached hereto, but excluding the Excluded Assets (collectively the “Purchased
Assets”):

(a) The Transferred Intellectual Property Rights;

(b) All rights of Seller under the Transferred Contracts existing as of or
arising after the Closing, but excluding for purposes of clarification the
Seller Receivables;

(c) The Transferred Books and Records;

 

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(d) All Documentation;

(e) All Tangible Assets, other than Excluded Assets set forth at Schedule 2.2;

(f) The Transferred Regulatory Approvals;

(g) All other assets of Seller used in the operation of the Business and not
described in Section 2.2 below;

(h) Any rights under Contracts that are not Transferred Contracts (including
without limitation employment agreements, consulting agreements, and employee
assignment of inventions agreements) to the extent necessary to enforce the
Transferred Intellectual Property Rights; and

(i) All rights to recover past, present and future damages for the breach,
infringement or misappropriation, as the case may be, of any of the foregoing.

2.2 Excluded Assets. Seller shall retain all assets of Seller that are not
Purchased Assets (collectively, the “Excluded Assets”), which retained assets
shall include, without limitation:

(a) All cash, cash equivalents and bank accounts owned by Seller on the Closing
Date, including for purposes of clarification any pre-paid deposits received by
Seller from its customers;

(b) All pre-paid deposits made by Seller to a Third Party;

(c) All Contracts other than the Transferred Contracts;

(d) All rights of Seller under the Transferred Contracts existing as of or
arising on or prior to the Closing, including all Seller Receivables;

(e) All Books and Records other than Transferred Books and Records;

(f) All Tangible Assets set forth at Schedule 2.2;

(g) All of Seller’s insurance policies and rights of Seller thereunder;

(h) All rights of Seller under this Agreement and other agreements executed in
conjunction herewith; and

(i) All rights to recover past, present and future damages for the breach,
infringement or misappropriation, as the case may be, of any of the foregoing.

 

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2.3 Assumption of Liabilities. As additional consideration for the Purchased
Assets, Buyer shall assume the following (collectively the “Assumed
Liabilities”):

(a) All obligations of Seller under the Byers Peak Contract (as defined on
Schedule 2.1) whether arising before or after the Closing Date, and all
obligations of Seller under all other Transferred Contracts that arise after the
Closing Date; and

(b) All warranty and product liability liabilities of Seller (express or
implied) arising with respect to the Seller Products, whether arising before or
after the Closing Date; provided, however, that if at any time within one year
of the date of this Agreement Buyer is required to pay any amount or incur any
cost to satisfy any warranty or product liability liabilities of Seller arising
with respect to Seller Products sold prior to the Closing, Buyer may offset such
amount against royalties due to Seller under Section 7 and shall provide
appropriate document supporting any such offset.

Except for the Assumed Liabilities, Buyer shall not be obligated to assume or
perform and is not assuming or performing any liabilities or obligations of
Seller (including Seller Payables), whether known or unknown, fixed or
contingent, certain or uncertain, and regardless of when such liabilities or
obligations may arise or may have arisen or when they are or were asserted,
including without limitation all liabilities arising from (i) any agreement or
arrangement (whether written or oral) between or among Seller, JNJ and/or AHI,
or (ii) the operation of the Business prior to Closing (the “Retained
Liabilities”), and Seller shall remain responsible for all Retained Liabilities.

2.4 JNJ APA. On even date herewith, Buyer and JNJ will enter into the JNJ APA,
which is attached as Exhibit B. Seller acknowledges that it has reviewed the JNJ
APA and that in consideration for Buyer entering into this Agreement and the JNJ
APA, Seller expressly consents to Buyer’s right to offset claims against JNJ
under the JNJ APA against the Royalty Consideration (as defined in
Section 7.1(a)) and the Success Milestone (as defined in Section 7.2) payable by
Buyer to Seller under this Agreement.

2.5 Transfer Documents. On the Closing Date, (i) the sale of the Tangible
Assets, and any other tangible assets included in the Purchased Assets by Seller
to Buyer in accordance with this Agreement will be further evidenced by a Bill
of Sale in substantially the form of Exhibit C hereto (the “Bill of Sale”);
(ii) the assignment of the Purchased Assets to Buyer and assumption of the
Assumed Liabilities by Buyer in accordance with this Agreement will be further
evidenced by an Assignment and Assumption Agreement (the “Assignment and
Assumption Agreement”) in substantially the form of Exhibit D hereto; (iii) the
assignment of the Transferred Intellectual Property Rights from Seller to Buyer
in accordance with this Agreement will be further evidenced by assignment
documents relating to Trademarks in the form attached as Exhibit E hereto (the
“Intellectual Property Assignments”).

2.6 Consideration. The consideration for the sale to Buyer of the Purchased
Assets under this Agreement and the sale to Buyer of the JNJ Purchased Assets
pursuant to the JNJ APA shall consist of (i) $11,960,000 (the “ACI Cash
Consideration”, which is payable pursuant to this Agreement) and the JNJ Cash
Consideration (as defined in and payable under the JNJ APA) (collectively, the
“Cash Consideration”); (ii) the assumption by Buyer of the Assumed Liabilities
pursuant to this Agreement; (iii) the Royalty Consideration (as defined in
Section 7.1(a)); and (iv) the potential to earn a Success Milestone (as defined
in Section 7.2 and together with the Cash

 

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Consideration and Royalty Consideration, the “Purchase Price”). For the
avoidance of doubt, Buyer will not be required to make any payments other than
the JNJ Cash Consideration to JNJ in consideration for the sale to Buyer of the
JNJ Purchased Assets under the JNJ APA.

2.7 Escrow Amount. Notwithstanding anything contained in this Agreement to the
contrary, Buyer will refrain from paying to Seller at Closing [*] of the
Purchase Price (the “Escrow Amount”) for collateral payment of any amounts owed
to Buyer for indemnification pursuant to Section 9 of this Agreement or for
indemnification under the JNJ APA as described at Section 9.3(g). The Escrow
Amount will be distributed to Buyer and/or Seller in accordance with the terms
of the Escrow Agreement.

2.8 The Closing. The consummation of the transactions contemplated hereby (the
“Closing”) shall take place simultaneously with the execution of this Agreement
(the “Closing Date”) at the offices of Ropes & Gray LLP, 525 University Avenue,
Palo Alto, California, or at such other date and place as the Parties may agree
and shall be deemed to occur at 1:00 p.m., local time, on such date.

(a) Closing Deliveries of Seller. At the Closing, Seller shall deliver, or cause
to be delivered to Buyer, the documents and instruments set forth in
Section 5.5, in form and substance reasonably satisfactory to Buyer and its
counsel.

(b) Closing Deliveries of Buyer. At the Closing, Buyer shall deliver, or cause
to be delivered: (i) an amount equal to the ACI Cash Consideration minus the
Exclusivity Payments plus [*] to cover Colorado sales tax, consisting of (x) to
Seller, [*] in cash payable by wire transfer to such account as Seller may
reasonably direct, or by such other method of payment as Seller and Buyer may
mutually agree, and (y) to the Escrow Agent, [*] in cash payable by wire
transfer to be held in escrow pursuant to the Escrow Agreement; and (ii) the
documents and instruments set forth in Section 6.4, in form and substance
reasonably satisfactory to Seller and its counsel.

2.9 Allocation of Purchase Price. The Purchase Price shall be allocated
consistent with the reasonable good faith determination of Buyer after
consultation with Seller and JNJ within sixty (60) days following the Closing.
The Parties and JNJ acknowledge that for financial reporting purposes, Buyer is
required to determine and allocate a purchase price for the acquisition of the
Purchased Assets and the JNJ Purchased Assets in accordance with GAAP in the
United States, and that Buyer’s determinations under GAAP will differ from the
requirements of Section 1060 of the Internal Revenue Code and the regulations
promulgated thereunder. Buyer and Seller hereby agree that the amounts set forth
in the Bill of Sale (Exhibit C) represent the fair market value of all tangible
assets included in Purchased Assets. These fair market values will be used in
the allocation of the Purchase Price and in the determination of state or local
taxes due as of the Closing. However, the value of inventory set forth in the
Bill of Sale reflects a preliminary valuation, and is subject to the final
determination of the allocation to be performed during such sixty (60) day
period. After the Closing, Buyer and Seller shall make consistent use of the
allocation required under Section 1060 of the Internal Revenue Code for all Tax
purposes and in all filings, declarations and reports with the Internal Revenue
Service or any other applicable

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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taxing authority in respect thereof. In any and all actions, suits, proceedings,
arbitration, or governmental or regulatory investigations or audits related to
the determination of any Tax, neither Buyer nor Seller shall contend or
represent that such allocation is not a correct allocation.

2.10 Transfer Taxes. Buyer shall pay Seller for any sales, use, excise or
similar transfer taxes that Seller may owe in connection with the sale and
purchase of the Purchased Assets. Seller acknowledges that Buyer shall purchase
all inventory for resale.

2.11 Consents. Nothing in this Agreement shall be construed as an attempt or
agreement to assign any Transferred Contract which is non-assignable without the
consent of the party or parties thereto unless such consent shall have been
obtained. Buyer and Seller shall use commercially reasonable efforts to obtain
the consents of any other party required in connection with the transfer of any
Transferred Contract requiring such consent and Seller shall provide Buyer with
all of the benefits enjoyed by Seller under any such Transferred Contract until
consent to the assignment thereof is obtained. Buyer also hereby agrees that
following the date of this Agreement, it will use commercially reasonable
efforts to obtain from all parties to any Transferred Contract (other than
Seller) a release of Seller from any obligations or liabilities arising with
respect to such Transferred Contract, whether now known or unknown. Neither
party shall be obligated to make payment or provide any other consideration to
obtain such consent or such release.

3. Representations and Warranties of Seller. Seller hereby represents and
warrants to Buyer, subject to the exceptions specifically disclosed in the
attached schedule of exceptions (the “Disclosure Schedule”), as follows:

3.1 Authority and Binding Effect. Seller has the full corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements.
This Agreement and the Ancillary Agreements, and the consummation by Seller of
its obligations contained herein and therein, have been duly authorized by all
necessary corporate actions of Seller, and this Agreement and the Ancillary
Agreements have been duly executed and delivered by Seller. This Agreement and
the Ancillary Agreements are valid and binding agreements of Seller, enforceable
against Seller in accordance with their respective terms.

3.2 Organization and Standing. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado, and
Seller is qualified to do business in the state of Colorado, which is the only
jurisdiction where such qualification is necessary and where the failure of
Seller to be so qualified would have a Material Adverse Effect on Seller. Seller
has the requisite corporate power and authority to conduct the Business as now
conducted and as currently proposed to be conducted, to own or lease the
Purchased Assets, to use such Purchased Assets in the conduct of its Business,
and to perform all of its obligations under the Transferred Contracts. Seller
has delivered to Buyer or its counsel a true and correct copy of its certificate
of incorporation and bylaws, each as amended to date and in full force and
effect on the date hereof.

 

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3.3 Financial Statements. Seller has delivered to Buyer its audited balance
sheet for the period ended June 30, 2007, its audited statements of operations,
statements of stockholders’ equity, and statements of cash flows for the period
from June 28, 2004 to June 30, 2007, its unaudited balance sheets and statements
of operations for the six month period ended December 31, 2007, and its
unaudited balance sheets and statements of operations for the three month period
ended March 31, 2008 (collectively, the “Seller Financial Statements”). The
Seller Financial Statements are correct in all material respects and present
fairly the financial condition and operating results of Seller as of the date(s)
and during the period(s) indicated therein. The audited Seller Financial
Statements have been prepared in accordance with GAAP applied on a consistent
basis throughout the period indicated, except as disclosed therein. The
unaudited Seller Financial Statements do not contain additional financial
statements and footnotes required under GAAP, and are subject to normal year-end
adjustments.

3.4 Seller Payables and Receivables. Section 3.4 of the Disclosure Schedule is a
true and complete list of Seller Payables and Seller Receivables as of the
Closing.

3.5 Absence of Certain Changes. Since March 31, 2008 there has not been any
sale, transfer, or other disposition of, or the incurrence or imposition of any
Encumbrance of any kind, on or affecting the Business or any of the Purchased
Assets, except (i) as may be described in the written terms of the Transferred
Contracts; (ii) the transfer to Buyer of the Purchased Assets contemplated by
this Agreement; and (iii) sales of inventory in the ordinary course of business.

3.6 The Purchased Assets. Seller has, and on the Closing Date will convey and
transfer to Buyer all its interest in the Purchased Assets, including but not
limited to good and valid title, free and clear of all Encumbrances of any
nature whatsoever, except for Permitted Encumbrances and Encumbrances arising by
the terms of the Transferred Contracts. Section 3.6 of the Disclosure Schedule
lists all Tangible Assets owned or leased by Seller for use in the Business
(except as set forth on Schedule 2.2) and that were purchased or leased by
Seller for a price in excess of $1,000, and all such Tangible Assets that are
material to the operation of the Business are in good operating condition,
regularly and properly maintained, subject to normal wear and tear. The
Purchased Assets, together with the JNJ Purchased Assets, are sufficient for the
operation of the Business.

3.7 Transferred Contracts. Except as set forth on Schedule 2.2, the Transferred
Contracts are all executory Contracts between Seller and any Person used in the
operation of the Business, and true and complete copies of all such Contracts
have been delivered to Buyer. Except as set forth on Schedule 2.2, the
Transferred Contracts are all of the Contracts necessary for the operation of
the Business. Except as would not have a Material Adverse Effect on Seller, each
Transferred Contract is in full force and effect and Seller is not in breach,
violation or default thereunder nor is any Person obligated to Seller pursuant
to any such Transferred Contract in breach, violation or default thereunder.
Seller has not received notice that Seller has breached, violated or defaulted
under, any of the terms or conditions of any Transferred Contract. Immediately
following the Closing, and except as would not have a Material Adverse Effect on
Seller, Buyer will be permitted to exercise all of the rights Seller had
immediately prior to the Closing under the Transferred Contracts without the
payment of any additional amounts or consideration other than ongoing fees or
payments which Seller would otherwise be required to pay pursuant to the terms
of such Transferred Contracts had the transactions contemplated by this
Agreement not occurred; provided, however, that Seller makes no representation
or warranty as to

 

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restrictions that may exist, or payments that may be required, by virtue of any
condition applicable to Buyer or any action or inaction taken by Buyer and the
Existing JNJ-ACI License will be terminated pursuant to the Termination
Agreement. Other than the Transferred Contracts and other than as contemplated
by the Termination Agreement, there is no agreement (not to compete or
otherwise), commitment, judgment, injunction, order or decree to which Seller is
a party relating to the Business or otherwise binding upon the Seller or the
Business which has or may have the effect of prohibiting or impairing the
transactions contemplated by this Agreement, or affecting the validity, use or
enforceability of the Purchased Assets. Other than the Transferred Contracts,
Seller has not entered into any agreement which places any restrictions upon
Seller with respect to selling, licensing or otherwise distributing any of the
Seller Products, the Transferred Intellectual Property Rights, or the JNJ
Transferred Intellectual Property Rights to, or providing services to, customers
or potential customers or any class of customers, in any geographic area, during
any period of time or in any segment of the market. To Seller’s Knowledge, no
party to a Transferred Contract that requires consent to transfer has indicated
to Seller that it is unwilling to provide such consent or to provide a release
of Seller in connection therewith.

3.8 Intellectual Property

(a) Each item of Transferred Intellectual Property Rights is held by Seller free
and clear of any Encumbrances (including without limitation any distribution
rights and royalty rights), other than Permitted Encumbrances and Encumbrances
arising by the terms of the Transferred Contracts or the JNJ APA. Except as
provided in the Transferred Contracts, all Transferred Intellectual Property
Rights will be fully transferable, alienable or licensable by Buyer without
restriction and without payment of any kind to any Third Party. The Transferred
Intellectual Property Rights, the Transferred Contracts and the JNJ Transferred
Intellectual Property Rights constitute all of the Intellectual Property Rights
used in or necessary for the operation of the Business.

(b) Schedule 2.1 accurately and completely identifies all Filed Intellectual
Property Rights that are owned or transferable by Seller. All Filed Intellectual
Property Rights included in the Transferred Intellectual Property Rights are
currently in compliance with formal legal requirements (including payment of
filing, examination and maintenance fees and proofs of use), and are not subject
to any unpaid maintenance fees or taxes or actions falling due within ninety
(90) days after the Closing Date. There are no proceedings or actions before any
court, tribunal, administrative agency, or commission (including the United
States Patent and Trademark Office or equivalent authority anywhere in the
world) related to any such Filed Intellectual Property Rights included in the
Transferred Intellectual Property Rights.

(c) To the extent that any Transferred Intellectual Property Rights were
originally owned or created by or for any Third Party, but excluding any Off the
Shelf Software (i) the Seller has a written agreement with such Third Party or
Third Parties with respect thereto, pursuant to which the Seller has obtained
complete, unencumbered and unrestricted ownership (except for Permitted
Encumbrances and Encumbrances arising by the terms of the Transferred Contracts)
and is the exclusive owner of, all such Transferred Intellectual Property Rights
by valid assignment or otherwise; (ii) the transfer of the Transferred
Intellectual Property Rights from Seller to Buyer hereunder does not violate
such Third Party

 

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agreements; (iii) except as may be provided in the Transferred Contracts, such
Third Parties have not retained and do not have any rights or licenses with
respect to the Transferred Intellectual Property Rights; and (iv) to the
Knowledge of Seller, no valid basis exists for such Third Party to challenge or
object to this Agreement.

(d) Except pursuant to any Transferred Contracts or as will be transferred to
Buyer pursuant to the terms of this Agreement, Seller has not transferred
ownership of, or granted any license of or right to use, or authorized the
retention of any rights to use, to any Third Party, (i) any Transferred
Intellectual Property Rights or (ii) any JNJ Transferred Intellectual Property
Rights.

(e) No government funding, facilities of a university, college, other
educational institution or research center or funding from Third Parties was
used by Seller in the development of the Transferred Intellectual Property
Rights owned by Seller. To the Knowledge of Seller, no current or former
employee, consultant or independent contractor of Seller, who was involved in,
or who contributed to, the creation or development of any Transferred
Intellectual Property Rights has performed services for the government, a
university, college, or other educational institution, or a research center,
during a period of time during which such employee, consultant or independent
contractor was also performing services for Seller.

(f) Other than the Transferred Contracts and the proprietary rights agreements
described in Section 3.8(j) below, there are no Contracts, whether written or
oral, express or implied, to which Seller is a party with respect to any
Transferred Intellectual Property Rights.

(g) Neither the operation of the Business, including the making, using, selling,
licensing and distribution of Seller Products by Seller or immediately following
the Closing by Buyer did, do, or will: (i) to Seller’s Knowledge, infringe or
misappropriate the Intellectual Property Rights of any Person or (ii) to
Seller’s Knowledge, violate the rights of any Person (including rights to
privacy or publicity). To the Knowledge of Seller, Seller has not received
notice from any Person claiming that the Business, the Purchased Assets or the
JNJ Purchased Assets infringe or misappropriate the Intellectual Property Rights
of any Person (nor does Seller have Knowledge of any valid basis therefor). To
Seller’s Knowledge, no Person is infringing or misappropriating the Transferred
Intellectual Property Rights.

(h) There are no contracts, licenses or agreements between Seller and any other
Person with respect to the Transferred Intellectual Property Rights or the JNJ
Transferred Intellectual Property Rights, under which there is any dispute or,
to Seller’s Knowledge, any threatened dispute regarding the scope of such
agreement or performance under such agreement.

(i) Seller has taken all commercially reasonable steps that are required to
protect Seller’s rights in confidential information and trade secrets of Seller
associated with or related to the Transferred Intellectual Property Rights and
the JNJ Transferred Intellectual Property Rights.

 

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(j) Seller has and enforces a policy requiring each employee and consultant of
Seller to execute a proprietary rights agreement substantially in the form(s)
set forth in Section 3.8(j) of the Disclosure Schedule and all current and
former employees and consultants of Seller who have created or modified any of
the Transferred Intellectual Property Rights that are material to the operation
of the Business have executed such an agreement.

(k) Seller is not required to make or accrue any royalty payment to any Third
Party in connection with any of the Purchased Assets, other than as contemplated
by the Existing JNJ-ACI License.

3.9 Product Liabilities and Warranties. As of April 24, 2008 Seller has not
received written notice from any Person claiming that the Seller Products
manufactured, sold, leased, licensed or delivered by Seller give rise to any
liability for defective or improper design or manufacture, injury to individuals
or property or breach of any contractual commitment of Seller or of any express
or implied warranties made by Seller, and to Seller’s Knowledge there is no
valid basis for any such liability. No product manufactured, sold, leased,
distributed, licensed or delivered by Seller directly to consumers is subject to
any guaranty, warranty, or other indemnity beyond Seller’s applicable standard
terms and conditions of sale or lease, those implied or imposed by applicable
law, or as set forth in the terms of the Transferred Contracts.

3.10 Conflicts; Consents. The execution and delivery by Seller of this Agreement
and the Ancillary Agreements, and the consummation of the transactions
contemplated hereby and thereby, will not conflict with or result in any
violation of, or default under, or give rise to a right of termination,
cancellation, modification or acceleration of any obligation or loss of any
benefit under (any such event, a “Conflict”) (i) any provision of the
certificate of incorporation or bylaws of Seller, each as amended to date;
(ii) Contracts to which Seller or any of its properties or assets (including
intangible assets) is subject; or (iii) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Seller or any of its properties
or assets (tangible and intangible), except in any such case where it would not
have a Material Adverse Effect on Seller. Subject to the consent of Seller’s
board of directors and shareholders (which consent shall be obtained prior to
Closing), except as would not have a Material Adverse Effect on Seller, it is
not necessary for Seller to take any action or to obtain any approval, consent
or release by or from any Third Party, governmental or other, to enable Seller
to enter into or perform its obligations under this Agreement and the Ancillary
Agreements.

3.11 Compliance with Law/Permits. Except as may be required by any applicable
bulk sales laws, the Seller is in compliance with all, and is not in violation
of any, law, ordinance, order, decree, rule or regulation of any governmental
agency or authority, the violation of or noncompliance with which could have a
Material Adverse Effect on Seller. No unresolved (i) charges of violations of
laws or regulations relating to Seller’s business have been made or threatened;
(ii) proceedings or investigations relating to Seller’s business are pending or,
to Seller’s Knowledge, have been threatened; and (iii) citations or notices of
deficiency have been issued or have been threatened, against Seller relating to
or arising out of its business by any governmental authorities, which have had
or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Seller; and, to Seller’s Knowledge, there are no
facts or circumstances upon which any such charges, proceedings, investigations,
citations, or deficiency notices reasonably may validly be instituted, issued or
brought hereafter.

 

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3.12 Litigation and Proceedings. There is no claim, action, suit, proceeding or
investigation (or any counter or cross-claim in an action brought by or on
behalf of Seller), whether at law or in equity, or before or by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind, that is pending or, to Seller’s
Knowledge, threatened, against Seller, which (i) could reasonably be expected to
adversely affect Seller’s ability to perform its obligations under this
Agreement or complete any of the transactions contemplated hereby; or
(ii) involves the possibility of any judgment or liability, or which may become
a claim, against Buyer, its business or the Purchased Assets or JNJ Purchased
Assets. Seller is not subject to any judgment, order, writ, injunction, decree
or award of any court, arbitrator or governmental department, commission, board,
bureau, agency or instrumentality having jurisdiction over Seller, any of the
Purchased Assets or JNJ Purchased Assets or the Business that affects, involves
or relates to the Purchased Assets or the JNJ Purchased Assets. Without limiting
the generality of the foregoing, to the Knowledge of Seller, no stockholder,
director, officer, member, manager, or employee of Seller, JNJ, or AHI has
threatened or implied the possibility of, orally or in writing, any claim,
action, suit, proceeding or investigation against Seller, JNJ, AHI, or Buyer
relating to the transactions contemplated by this Agreement or the JNJ APA.

3.13 Tax Matters. To the extent failure to do so would adversely impact Buyer or
the Purchased Assets, Buyer’s use of the Purchased Assets or JNJ Purchased
Assets or operation of the Business, (a) as of the Closing Date, Seller will
have paid all Taxes it is required to pay and will have withheld with respect to
its employees all federal, state and foreign income taxes and social security
charges and similar fees under the Federal Insurance Contribution Act, Federal
Unemployment Tax Act and other Taxes required to be withheld; and (b) Seller has
not been delinquent in the payment of any Tax, nor is there any Tax deficiency
outstanding, assessed or proposed against Seller, nor has Seller executed any
waiver of any statute of limitations on or extending the period for the
assessment or collection of any Tax. To the extent relevant to the Purchased
Assets or the Business, (i) as of the Closing Date, Seller will have prepared
and timely filed all required federal, state, local and foreign returns,
estimates, information statements and reports (“Returns”) relating to any and
all Taxes concerning or attributable to Seller or its operations and required to
have been filed on or before the Closing Date (taking into account extensions to
file) and such Returns are or will be true and correct and have been or will be
completed in accordance with applicable law; and (ii) no audit or other
examination of any Return of Seller is presently in progress, nor has Seller
been notified of any request for such an audit or other examination. Seller does
not have, and to Seller’s Knowledge, there is no basis for, the assertion of any
claim for any liabilities for unpaid Taxes for which Buyer would become liable
as a result of the transactions contemplated by this Agreement. There are (and
immediately following the Closing there will be) no Encumbrances on the
Purchased Assets relating to or attributable to Taxes, other than Permitted
Encumbrances. To Seller’s Knowledge, there is no basis for the assertion of any
claim relating or attributable to Taxes which, if adversely determined, would
result in any Encumbrance, other than Permitted Encumbrances, on the Purchased
Assets.

 

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3.14 No Broker. Seller has not retained or used the services of an agent, finder
or broker in connection with the transactions contemplated by this Agreement.

4. Representations and Warranties of Buyer. Buyer represents and warrants to
Seller as follows:

4.1 Authority and Binding Effect. Buyer has the full corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements.
This Agreement and the Ancillary Agreements, and the consummation by Buyer of
its obligations contained herein and therein, have been duly authorized by all
necessary corporate actions of Buyer, and this Agreement and the Ancillary
Agreements have been duly executed and delivered by Buyer. This Agreement and
the Ancillary Agreements are valid and binding agreements of Buyer, enforceable
against Buyer in accordance with their respective terms.

4.2 Organization and Standing. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and Buyer
is qualified to do business in each jurisdiction where such qualification is
necessary and where the failure to be so qualified would have a Material Adverse
Effect on Buyer. Buyer has the requisite corporate power and authority to
conduct its business as now conducted, to own or lease the Purchased Assets, to
use such Purchased Assets in the conduct of its business, and to perform all of
its obligations under the Transferred Contracts.

4.3 Conflicts; Consents. The execution and delivery by Buyer of this Agreement
and the Ancillary Agreements, and the consummation of the transactions
contemplated hereby, will not give rise to a Conflict with respect to (i) any
provision of the certificate of incorporation or bylaws of Buyer, each as
amended to date; (ii) Contracts to which Buyer or any of its properties or
assets (including intangible assets) is subject; or (iii) any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Buyer or any
of its properties or assets (tangible and intangible), except in any such case
where it would not have a Material Adverse Effect on Buyer. It is not necessary
for Buyer to take any action or to obtain any approval, consent or release by or
from any Third Party, governmental or other, to enable Buyer to enter into or
perform its obligations under this Agreement and the Ancillary Agreements.

4.4 Compliance with Law/Permits. Buyer is in compliance with all, and is not in
violation of any, law, ordinance, order, decree, rule or regulation of any
governmental agency or authority, the violation of or noncompliance with which
could have a Material Adverse Effect on Buyer. No unresolved (i) charges of
violations of laws or regulations relating to Buyer’s business have been made or
threatened; (ii) proceedings or investigations relating to its business are
pending or, to Buyer’s knowledge, have been threatened; and (iii) citations or
notices of deficiency have been issued or have been threatened, against Buyer
relating to or arising out of its business by any governmental authorities,
which have had or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Buyer.

4.5 Litigation and Proceedings. There is no action, suit, proceeding or
investigation (or any counter or cross-claim in an action brought by or on
behalf of Buyer), whether at law or in equity, or before or by any governmental
department, commission, board,

 

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bureau, agency or instrumentality, domestic or foreign, or before any arbitrator
of any kind, that is pending or, to Buyer’s knowledge, threatened, against
Buyer, which (i) could reasonably be expected to adversely affect Buyer’s
ability to perform its obligations under this Agreement or complete any of the
transactions contemplated hereby; or (ii) to Buyer’s knowledge, involves the
possibility of any judgment or liability, or which may become a claim, against
Seller, its business or the Excluded Assets. Buyer is not subject to any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over Buyer, any of the Purchased Assets or the JNJ Purchased
Assets that affects, involves or relates to the Purchased Assets or the JNJ
Purchased Assets.

4.6 No Broker. Buyer has not retained or used the services of an agent, finder
or broker in connection with the transactions contemplated by this Agreement.

5. Conditions Precedent to the Obligations of Buyer. The obligation of Buyer to
consummate the purchase of the Purchased Assets from Seller is subject to the
fulfillment, or the waiver by Buyer, at or prior to the Closing, of each of the
following conditions precedent:

5.1 JNJ APA. Buyer and JNJ shall have executed the JNJ APA.

5.2 Representations and Warranties. The representations and warranties made by
Seller in this Agreement (a) that are not qualified by materiality or Material
Adverse Effect on Seller will be true and correct, in all material respects, at
and as of the Closing Date, and (b) that are qualified by materiality or
Material Adverse Effect on Seller will be true and correct in all respects at
and as of the Closing Date (in each case, except for any such representations
and warranties that are made as of a particular date, which will be true and
correct in all material respects as of such particular date).

5.3 Certificates. Buyer shall have received from Seller one or more certificates
executed by an authorized officer of Seller, dated as of the Closing Date and
reasonably satisfactory in form and substance to Buyer, certifying that (i) the
condition set forth at Section 5.2 above has been met; (ii) Seller has performed
and complied, in all material respects, with all of Seller’s covenants required
to have been performed or complied with by Seller pursuant hereto on or prior to
the Closing Date; (iii) attached to such certificate(s) are true and correct
copies of Seller’s certificate of incorporation, by-laws, and resolutions of the
Board of Directors and stockholders of Seller approving the execution and
delivery of this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated hereby and thereby; and (iv) attached to such
certificate(s) are true and correct copies of the Seller Financial Statements.

5.4 Termination of Existing JNJ-ACI License. JNJ and Seller shall have executed
the Termination Agreement between Seller and JNJ, which is attached as Exhibit F
hereto (the “Termination Agreement”).

5.5 Delivery of Additional Documents. On the Closing Date, Seller shall deliver,
or cause to be delivered, to Buyer the following documents and instruments, in
form and substance satisfactory to Buyer and its counsel, unless waived in
writing by Buyer:

(a) Bill of Sale. The Bill of Sale, duly executed by the Seller;

 

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(b) Assignment and Assumption Agreement. The Assignment and Assumption
Agreement, duly executed by the Seller;

(c) Intellectual Property Assignments. The Intellectual Property Assignments,
duly executed by the Seller;

(d) Escrow Agreement. The Escrow Agreement, duly executed by Seller;

(e) Good Standing Certificates. Good standing certificate of Seller, dated as of
a date that is not more than five (5) days prior to the Closing Date, from the
Secretary of State of Colorado;

(f) Intellectual Property Documents. Evidence of Seller’s authorization to its
intellectual property counsel to deliver files relating to the Transferred
Intellectual Property Rights and JNJ Transferred Intellectual Property Rights to
Buyer’s counsel; and

(g) Other Documents. Such other documents and instruments as Buyer or Buyer’s
counsel may reasonably request so as better to evidence or effectuate the
transactions contemplated hereby.

6. Conditions Precedent to Obligations of Seller. The obligation of Seller to
consummate the sale of the Purchased Assets to Buyer is subject to the
fulfillment, or the waiver by Seller, at or prior to the Closing, of each of the
following conditions precedent:

6.1 JNJ APA. Buyer and JNJ shall have executed the JNJ APA.

6.2 Representations and Warranties. The representations and warranties made by
Buyer in this Agreement (a) that are not qualified by materiality or Material
Adverse Effect on Buyer will be true and correct, in all material respects, at
and as of the Closing Date, and (b) that are qualified by materiality or
Material Adverse Effect on Buyer will be true and correct in all respects at and
as of the Closing Date (in each case, except for any such representations and
warranties that are made as of a particular date, which will be true and correct
in all material respects as of such particular date).

6.3 Certificates. Seller shall have received from Buyer a certificate executed
by an authorized officer of Buyer, dated as of the Closing Date and reasonably
satisfactory in form and substance to Seller, certifying that (i) the condition
set forth at Section 6.2 above has been met; (ii) Buyer has performed and
complied, in all material respects, with all of Buyer’s covenants required to
have been performed or complied with by Buyer pursuant hereto on or prior to the
Closing Date; and (iii) attached to such certificate are true and correct copies
of Buyer’s certificate of incorporation, by-laws, and resolutions of the Board
of Directors of Buyer approving the execution and delivery of this Agreement and
the Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby.

 

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6.4 Delivery of Additional Documents. On the Closing Date, Buyer shall deliver,
or cause to be delivered, to Seller the following documents and instruments, in
form and substance satisfactory to Seller and its counsel, unless waived in
writing by Seller:

(a) Bill of Sale. The Bill of Sale, duly acknowledged by Buyer.

(b) Assignment and Assumption Agreement. The Assignment and Assumption
Agreement, duly executed by Buyer.

(c) Escrow Agreement. The Escrow Agreement, duly executed by Buyer.

(d) Good Standing Certificates. A good standing certificate of Buyer, dated as
of a date that is not more than five (5) days prior to the Closing Date, from
the Secretaries of States of Delaware and California; and

(e) Other Documents. Such other documents and instruments as Seller or Seller’s
counsel may reasonably request so as better to evidence or effectuate the
transactions contemplated hereby.

7. Royalty Payments.

7.1 Royalties.

(a) Royalty Rate. Subject to the provisions in this Section 7.1 and Section 7.4,
on a Product-by-Product and country-by-country basis, Buyer will pay to Seller,
on a quarterly basis, the Royalty Rate on Net Sales of any Product during the
applicable Royalty Period (the “Royalty Consideration”). After expiration of the
Royalty Period for a Product, no further royalty payments will be payable in
respect of sales of such Product.

(b) Cumulative Royalties. The obligation to pay the Royalty Consideration will
be imposed only once with respect to each unique Product, regardless of how many
Valid Claims included within the JNJ Transferred Patent Rights would, absent the
transfer by JNJ to Buyer of the JNJ Transferred Patent Rights under the JNJ APA,
be infringed by the manufacture, use, or sale of such Product. In no event will
royalties be payable under this Agreement with respect to the sale of a Product
for which royalties are due to AHI pursuant to an agreement between Buyer and
AHI as contemplated in Section 8.3.

(c) Combination/Bundled Products. In the event that a Product is sold by Buyer
or its Affiliates or Licensees in combination with one or more products which is
itself not a Product (including without limitation the sale of a Product at a
discounted price in consideration for the customer’s simultaneous purchase of an
additional product which is not itself a Product), then Net Sales shall be
calculated by multiplying the sales price of such combination sale by the
fraction A/(A+B) where A is the Fair Market Value of the Product(s) and B is the
Fair Market Value of the other product(s) in the combination sale.

 

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(d) Payment Obligations. After Buyer has made cumulative total payments of [*]
in Royalty Consideration under this Agreement and the JNJ APA, Buyer will have
no further obligations to make royalty payments under Section 7.1(a).

7.2 Success Milestone. If the amount of Net Sales of Products for any calendar
year between and including 2011 and 2014 is greater than sixty million dollars
($60,000,000), then Buyer will pay to Seller a one-time milestone payment (the
“Success Milestone”) of seven million five hundred thousand dollars ($7,500,000)
within sixty (60) days after the end of the earliest such calendar year. For
clarity, even if the amount of Net Sales of Products is greater than sixty
million dollars ($60,000,000) in more than one calendar year, Buyer will only be
required to make the Success Milestone payment one time.

7.3 Royalty Buyout. During the period starting January 1, 2014 and ending
December 31, 2014, Buyer will have the option upon thirty (30) days’ notice to
Seller to satisfy its obligations to pay the remaining Royalty Consideration due
under this Agreement and the JNJ APA in a single payment (the “Royalty Buyout”),
based on the following formula: if the compounded annual growth rate (“CAGR”) of
Royalty Consideration beginning January 1, 2011 and ending December 31, 2013
(i) is less than [*], the Royalty Buyout will be equal to [*] the average annual
Royalty Consideration paid during that period; (ii) is between [*], the Royalty
Buyout will be equal to [*] the average annual Royalty Consideration paid during
that period; and (iii) is greater than [*], the Royalty Buyout will be equal to
[*] the average annual Royalty Consideration paid during that period. If Buyer
exercises its option to pay the Royalty Buyout in accordance with the terms of
this Section 7.3, then as of the date Seller receives payment of the Royalty
Buyout, Buyer will have no further royalty obligations under this Agreement or
the JNJ APA.

7.4 Royalty Adjustments and Offsets.

(a) Third Party Licenses Necessary to Commercialize. If Buyer or its Affiliate
or Licensee enters into an agreement after the Effective Date with one or more
Third Parties to obtain a license under a patent or other right that Buyer or
its Affiliate or Licensee reasonably believes or expects to be necessary to
practice the Transferred Intellectual Property Rights or the JNJ Transferred
Intellectual Property Rights with respect to Products in any country (including,
e.g., rights under Third Party patent applications that, if issued, would be
necessary) (each such Third Party license referred to herein as a “Third Party
License”), then any Royalty Consideration otherwise payable to Seller under this
Agreement with respect to Net Sales of any Product in such country will be
reduced by the amount of royalties or other payments paid by Buyer or its
Affiliate or Licensee to Third Parties pursuant to such additional Third Party
Licenses. Notwithstanding the foregoing, in no event will the offsets taken
pursuant to this Section 7.4(a) with respect to the first Third Party License
granted reduce the aggregate Royalty Consideration payable for any Calendar
Quarter (calculated prior to any offsets or adjustments taken under this
Section 7.4) by more than fifty percent (50%); provided, however, that this
limitation will not apply to Third Party Licenses granted from former employees
of or consultants to Seller or its Affiliates. If Buyer or its Affiliate or
Licensee enters into any additional Third Party Licenses, the aggregate Royalty
Consideration payable for any Calendar Quarter may be further reduced, subject
to the limit set forth in Section 7.4(d).

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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(b) Third Party Actions. In the event a Third Party commences any action against
Buyer alleging that a Product violates the Third Party’s Intellectual Property
Rights, then any Royalty Consideration otherwise payable to Seller under this
Agreement with respect to Net Sales of such Product will be reduced by the
amount of Buyer’s expenses related to the action, including attorneys’ fees and
costs and experts’ fees and costs; provided, however, that if Buyer ultimately
recovers attorneys’ fees or any other expenses that Buyer had previously offset,
then Buyer will reimburse Seller for such offset expenses. Notwithstanding the
foregoing, in no event will the offsets taken pursuant to this Section 7.4(b)
reduce the aggregate Royalty Consideration payable for any Calendar Quarter
(calculated prior to any offsets or adjustments taken under this Section 7.4) by
more than fifty percent (50%).

(c) Competitive Third Party Devices. If a directly competitive radio-frequency
ablation device is commercialized by a Third Party in any country (a
“Competitive Third Party Device”), and if after the first sale of such
Competitive Third Party Device in the applicable country Buyer experiences a
twelve percent (12%) or more decrease in sales, market share, or average selling
price, as determined by comparing the applicable Calendar Quarter to the twelve
(12) month average immediately prior to that Calendar Quarter, with respect to a
Product sold by Buyer in that country, then the Royalty Rate with respect to
such Product in such country will be reduced by fifty percent (50%) from the
Royalty Rate otherwise applicable to such Product in such country, until such
Third Party ceases to sell Competitive Third Party Devices in that country,
after which the Royalty Rate will revert to the level otherwise applicable under
this Agreement. Buyer, in its sole commercially reasonable judgment, will
determine if the Competitive Third Party Device infringes a Valid Claim included
within the JNJ Transferred Patent Rights and if enforcement actions should be
taken.

(d) Maximum Offset. Notwithstanding anything to the contrary herein, and except
as provided in the following sentence, in no event will the aggregate Royalty
Consideration payable for any Calendar Quarter, after all offsets and
adjustments under this Section 7.4 have been applied (but excluding offsets
allowed under other sections of this Agreement, including without limitation
offsets for indemnification claims under Section 9.3(e)), be less than [*] of
aggregate Net Sales. The offsets and adjustments allowed under this Section 7.4
do not apply to Net Sales of a Product for which there is no Valid Claim
included within the JNJ Transferred Patent Rights covering the manufacture, use,
sale, offer for sale, or importation of such Product in such country (in which
case the Royalty Consideration for sales of such Product in such country will be
[*] of Net Sales without any offset or adjustment under this Section 7.4). All
offsets will be taken in the Calendar Quarter in which such offset is incurred,
and amounts that cannot be offset will be carried forward to future Calendar
Quarters.

7.5 Reports and Royalty Payments. Within sixty (60) days after the end of each
Calendar Quarter during the Royalty Period, Buyer will deliver to Seller a
report setting forth for such Calendar Quarter the following information on a
Product-by-Product and country-by-country basis: (i) the gross sales and Net
Sales of each Product; (ii) the number of units of Products sold by

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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Buyer, its Affiliates, and its Licensees; (iii) the basis for any adjustments to
the royalty payments payable for the sale of each Product; (iv) the royalty
payments due under this Agreement for the sale of each Product; and (v) the
applicable exchange rate as determined pursuant to Section 7.6(b). Buyer will
remit the total royalty payments due for the sale of Products during such
Calendar Quarter at the time such report is made. No such reports or royalty
payments will be due for any Product before the First Commercial Sale of such
Product.

7.6 Payment Provisions Generally.

(a) Taxes and Withholding. All payments under this Agreement will be made
without any deduction or withholding for or on account of any tax unless such
deduction or withholding is required by applicable laws or regulations. If Buyer
is so required to deduct or withhold, Buyer will (i) promptly notify Seller of
such requirement; (ii) pay to the relevant authorities the full amount required
to be deducted or withheld promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such amount has
been assessed against Seller; (iii) promptly forward to Seller an official
receipt (or certified copy) or other documentation reasonably acceptable to
Seller evidencing such payment to such authorities; (iv) make payments due to
Seller net of such deductions or withholdings; and (v) provide all reasonable
assistance to Seller in recovering or crediting such amounts for the benefit of
Seller.

(b) Payment and Currency Exchange. All amounts payable and calculations
hereunder will be in United States dollars. Whenever for the purposes of
calculating the royalty payments payable under this Agreement conversion from
any foreign currency will be required, all amounts will first be calculated in
the currency of sale and then converted into United States dollars using the
rate of exchange quoted in the New York edition of The Wall Street Journal on
the last Business Day of the applicable Calendar Quarter to which the payment
relates.

7.7 Maintenance of Records; Audits.

(a) Record Keeping. Buyer will keep, and will cause its Affiliates and Licensees
to keep, books and accounts of record in connection with the sale of Products
and in sufficient detail to permit accurate determination of all figures
necessary for verification of royalty payments to be paid pursuant to this
Agreement. Buyer will maintain, and Buyer will cause its Affiliates and
Licensees to maintain, such records for a period of at least two (2) years after
the end of the calendar year in which they were generated.

(b) Audits. Upon thirty (30) Business Days’ prior written notice from Seller,
Buyer will permit an independent certified public accounting firm of nationally
recognized standing selected by Seller and reasonably acceptable to Buyer, to
examine, at Seller’s sole expense, the relevant books and records of Buyer, its
Affiliates, and its Licensees as may be reasonably necessary to verify the
amounts reported by Buyer as royalty payments. An examination by Seller under
this Section 7.7(b) will occur not more than once in any calendar year and will
be limited to the pertinent books and records for any Calendar Quarter ending
not more than two (2) years before the date of the request. The selected
accounting firm will be

 

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provided access to such books and records at Buyer’s facility(ies) where such
books and records are normally kept and such examination will be conducted
during Buyer’s normal business hours. Buyer may require the selected accounting
firm to sign a standard non-disclosure agreement before providing such
accounting firm access to Buyer’s facilities or records, provided that such
agreement shall permit disclosure to ACI as reasonably necessary under the terms
of this Agreement and the JNJ APA, or disclosure as required by applicable law.
Upon completion of the audit, the selected accounting firm will provide both
Buyer and Seller a written report disclosing any discrepancies in the reports
submitted by Buyer, and, in each case, the specific details concerning any
discrepancies. No other information will be provided to Seller. After Seller has
performed an audit in accordance with the provisions of this Section 7.7(b) with
respect to a particular Calendar Quarter, Seller will have no right to conduct
any additional audits with respect to such Calendar Quarter.

(c) Underpayments/Overpayments. If the accounting firm selected under
Section 7.7(b) correctly concludes that additional royalty payments were due to
Seller pursuant to this Agreement, Buyer will pay to Seller the additional
royalty payments within ten (10) days of the date Buyer receives such
accountant’s written report so correctly concluding. If such underpayment
exceeds five percent (5%) of the royalty payments that were due to Seller, Buyer
also will reimburse Seller for all reasonable expenses incurred in conducting
the audit. If such accounting firm correctly concludes that Buyer overpaid
royalty payments to Seller, Seller will refund such overpayments to Buyer,
within ten (10) days of the date Seller receives such accountant’s report so
correctly concluding.

(d) Confidentiality. All financial information of Buyer that is subject to audit
under Section 7.7(b) will be deemed to be confidential information of Buyer
subject to the provisions of Section 10.3 hereof, and Seller will not disclose
such confidential information to any Third Party or use such confidential
information for any purpose other than verifying payments to be made or
rectifying any underpayments hereunder or otherwise as allowed pursuant to
Section 10.3 below.

8. Post-Closing Covenants.

8.1 Commercially Reasonable Efforts.

(a) Buyer will use commercially reasonable efforts, consistent with its efforts
in respect of other products which it owns or to which it has rights, to develop
and commercialize Products for the treatment of glabellar furrows during the
Royalty Period; provided that Buyer will not be required to use any level of
efforts to sell, market, or distribute Products in any jurisdiction prior to
receipt of all regulatory approvals reasonably deemed by Buyer to be necessary
for the marketing and sale of Products in such jurisdiction.

(b) Buyer will spend a cumulative minimum of approximately [*] in operating
expenses related to the Products and the JNJ Transferred Intellectual Property
Rights in the first two (2) years following the receipt of regulatory approval
for the treatment of glabellar furrows, which investment may be in the form of
research and development, acquisition of technology enhancements, clinical
studies, obtaining

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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regulatory approval, clinical education, sales and marketing efforts, and/or the
assumption of certain employees of Seller and associated operating expenses. The
Parties agree that such investment will satisfy Buyer’s obligations under this
Section 8.1 during that two year period; provided that Buyer may reasonably
adjust such investment amount as a result of material unforeseen events,
including but not limited to, unfavorable developments related to regulatory
approvals or Intellectual Property Rights.

(c) Whether certain efforts by Buyer are deemed to be “commercially reasonable”
under this Section 8.1 with respect to Products for the treatment of glabellar
furrows will be determined in light of all relevant factors in the relevant
jurisdictions including (1) the market potential and rate of market growth of
Products (including anticipated profit margin and the perceived market size);
(2) the expense and difficulty of obtaining regulatory approval for Products in
each jurisdiction (including the extent of the indications, if any, for which
Products have been approved); (3) in Buyer’s reasonable estimation, whether or
not the sale of Products infringes or could infringe the Intellectual Property
Rights of Third Parties; and (4) the competitive position of Products vis-à-vis
other products marketed and sold for the same indications, including with
respect to the safety, efficacy, and cost of Products when compared to such
other products. Buyer’s reasonable commercial efforts may include, but are not
limited to, one or more of the following: developing and using a variety of
sales tools, promotions, and in-office marketing materials; organizing and
sponsoring clinical education programs; promoting Products through key opinion
leader programs and customer outreach programs; promoting Products at major
medical trade shows attended by plastic surgeons, facial plastic surgeons, ENT
surgeons, occuloplastic surgeons, and dermatologists; training, educating,
supporting, and maintaining representatives to market and sell Products for the
treatment of glabellar furrows; and applying reasonable financial, personnel,
and facilities resources in support of its Commercialization efforts. For
purposes of determining whether or not Buyer is complying with its obligations
under this Section 8.1, Buyer’s sales and marketing efforts for Products in all
relevant jurisdictions will be considered in the aggregate, and not by separate
jurisdiction.

(d) Seller acknowledges and agrees that nothing in this Agreement (including,
without limitation, any schedules or attachments hereto) will be construed as
representing an estimate or projection of either (i) the extent to which
Products will be successfully commercialized by Buyer or (ii) the anticipated
sales or the actual value of any Product. BUYER MAKES NO REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, THAT IT WILL BE ABLE TO SUCCESSFULLY
COMMERCIALIZE ANY PRODUCT OR, IF COMMERCIALIZED, THAT IT WILL ACHIEVE ANY
PARTICULAR SALES LEVEL OF SUCH PRODUCT(S).

8.2 Patent Prosecution. Buyer will use good faith efforts to prosecute and
maintain the JNJ Transferred Patent Rights such that the JNJ Transferred Patent
Rights cover the Products sold by Buyer.

8.3 Agreement with AHI. Buyer will negotiate in good faith with AHI to enter
into an agreement as outlined in the letter of intent sent by Buyer to AHI dated
as of the date of this Agreement, a copy of which has been provided to Seller.
Seller will not take any actions that impede or interfere with the negotiations
between Buyer and AHI. In the event that Buyer and

 

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AHI execute an agreement as described in this Section 8.3 and Buyer is obligated
to pay royalties to AHI on Products sold in the AHI Field, then (i) Buyer will
use reasonable efforts to determine whether the sale of a Product was in the
Royalty Field or the AHI Field; (ii) Buyer will not be in breach of this
Agreement or the JNJ APA as a result of failure to pay a royalty payment with
respect to a sale of a Product if Buyer has paid either AHI or Seller in good
faith a royalty on such sale; and (iii) in the event of a dispute as to whether
a Product sold by Buyer was sold in the AHI Field or the Royalty Field, the
Parties will submit the matter to dispute resolution proceedings in accordance
with Section 10.11.

8.4 Records Retention; Access and Investigation. After the Closing Date, Buyer
shall retain the Transferred Books and Records for a period consistent with its
current record-retention policies and practices, but in no event less than seven
(7) years. Buyer shall provide Seller and its representatives reasonable access
to such Books and Records during normal business hours and upon reasonable
notice, to enable Seller to (i) prepare financial statements or Tax returns or
to act with respect to Tax audits, (ii) prosecute or defend Third Party claims
or litigation, (iii) collect Seller Receivables and (iv) take any other action
reason reasonably related to this Agreement. For a period of sixty (60) days
following the Closing, upon the reasonable request of Seller, Buyer will allow a
limited number of employees of Seller who are not hired by Buyer to continue to
use the computer server, the computers assigned to such employees, and other
necessary Purchased Assets such as office furniture for purposes of winding down
the Business (the “Remaining Assets”); provided, however¸ that Buyer will retain
sole ownership of the Remaining Assets as of the Closing, Buyer will have full
access to the Remaining Assets and the information stored thereon while they
remain in Seller’s possession, and Seller will deliver such Remaining Assets to
Buyer promptly upon the expiration of such forty-five (45) day period, or at any
time upon Buyer’s request.

8.5 Further Assurances. Seller shall provide all cooperation reasonably
requested by Buyer in connection with any effort by Buyer to establish, perfect,
defend, or enforce its rights in or to the Purchased Assets and the JNJ
Purchased Assets, including executing further consistent assignments, transfers,
licenses, and releases. Without limiting the generality of the foregoing, each
Party will promptly notify the FDA of the transfer of the Transferred Regulatory
Approvals to Buyer in a form reasonably acceptable to Buyer, and Seller
cooperate with Buyer to ensure ongoing regulatory compliance pending FDA
recognition of the transfer, including providing reasonable correspondence to
the FDA at the reasonable request of Buyer. In addition, to the extent Seller
cannot transfer and assign any of the Transferred Intellectual Property Rights,
or any portion thereof, as of the Closing, then Seller will assign and transfer
such Transferred Intellectual Property Rights at the first opportunity to do so.
To the extent further transfer or assignment of any Transferred Intellectual
Property Rights is required and Seller has not, within fifteen (15) Business
Days of the delivery of such assignment to Seller, (i) executed and returned to
Buyer the form of assignment reasonably requested by Buyer or (ii) delivered to
Buyer a written objection to Buyer’s request, then Seller hereby irrevocably
appoints Buyer as its attorney-in-fact with the right, authority, and ability to
execute and enter into such assignment on behalf of Seller. Seller stipulates
and agrees that such appointment is a right coupled with an interest and will
survive the incapacity or unavailability of Seller at any future time. To the
extent that any of the Transferred Intellectual Property Rights cannot be
assigned and transferred by Seller, then Seller hereby grants Buyer an
irrevocable, worldwide, fully-paid up, royalty-free, exclusive license, with the
right to

 

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sublicense through multiple tiers, to make, use, sell, improve, reproduce,
distribute, perform, display, transmit, manipulate in any manner, create
derivative works based upon, and otherwise utilize in any manner the Transferred
Intellectual Property Rights. In addition, Seller hereby releases, discharges,
and covenants not to assert against Buyer or Buyer’s Affiliates, licensees, or
representatives, all claims, causes, and rights of action, whether now existing
or hereinafter arising, and whether known or unknown, arising from any use or
exploitation of the Transferred Intellectual Property Rights; provided, however,
that Seller does not release or covenant not to assert any claim, cause, or
right of action based upon the breach of this Agreement or the JNJ APA by Buyer.
Buyer shall provide all cooperation reasonably requested by Seller in connection
with any effort by Seller to establish, defend or enforce the assumption by
Buyer of the Assumed Liabilities, including executing further consistent
assumptions, assignments, transfers, licenses, and releases. To the extent Buyer
cannot assume any of the Assumed Liabilities, or any portion thereof, as of the
Closing, then Buyer will assume such Assumed Liabilities at the first
opportunity to do so.

8.6 Expenses. Except as otherwise provided herein, each Party shall pay all of
its respective costs and expenses incurred or to be incurred by it in
negotiating and preparing this Agreement and in carrying out and closing the
transactions contemplated by this Agreement, whether or not this Agreement or
the transactions contemplated hereby are ever consummated.

8.7 Solicitation. Buyer shall have the right to solicit and offer employment or
consulting engagements to Seller’s employees or consultants. Buyer will use
commercially reasonable efforts to hire or otherwise retain certain of the
Seller’s sales and marketing employees, research and development employees,
and/or consultants. Buyer will provide a compensation and benefits package to
such hired or retained employees or consultants at least economically comparable
to that currently provided by Seller. Buyer will have no obligation or liability
for employee related costs (e.g., employment benefits and severance payments)
with respect to employees of Seller not hired by Buyer. Seller further
acknowledges and agrees that Buyer may freely solicit, and employ or engage,
Seller’s former employees and consultants.

8.8 Consulting Agreements. Buyer shall negotiate in good faith with two of
Seller’s employees, Dr. James Newman and Mr. Michael Janssen, for their services
for at least two (2) years as independent contractors to Buyer to assist in the
future research and development and manufacturing efforts regarding Products.

8.9 Transition Support. Seller will provide commercially reasonable transition
support to Buyer as follows in this Section 8.9, in each case at the expense of
Buyer; provided, however, that it is acknowledged that (i) the obligations of
Seller set forth in this Section 8.9 apply only to the extent Seller continues
to retain employees that are qualified and able to assist with the obligations
set forth below; (ii) there is no affirmative obligation on the part of Seller
to retain such employees; and (iii) Seller shall be free to dismiss any employee
without regard to the obligations set forth below. Notwithstanding the
foregoing, Seller will not dismiss Carolyn Sterling as an employee, except for
cause, until forty-five (45) days after the Closing Date.

 

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(a) Books and Records; Access to Information. Seller will transfer the
Transferred Books and Records to Buyer within thirty (30) days after the Closing
Date. From the Closing Date until forty-five (45) days following the Closing
Date, upon reasonable notice received from Buyer and during normal business
hours, Seller shall afford Buyer and its representatives free and full access to
Seller’s personnel, properties, Contracts, Books and Records and other documents
and data (such rights of access to be exercised in a manner that does not
unreasonably interfere with the operations of Seller), and otherwise cooperate
and assist Buyer in each case, to the extent reasonably necessary (i) to confirm
that all Purchased Assets and Assumed Liabilities have been transferred to
Buyer, (ii) for Buyer to conduct the Business and use the Purchased Assets after
the Closing, and (iii) for Buyer to carry out its covenants under this Agreement
and the JNJ APA. Any information of Seller’s so reviewed by Buyer that does not
constitute Purchased Assets shall be kept strictly confidential by Buyer.

(b) Relationships. From the Closing Date until forty-five (45) days following
the Closing Date, Seller will cooperate with Buyer, at the reasonable request of
Buyer, in its efforts to continue and maintain for the benefit of Buyer those
relationships of Seller existing prior to the Closing Date and specific to the
Business, including relationships with regulatory authorities, licensors,
customers and suppliers, and Seller will satisfy the Retained Liabilities in
full as such liabilities become due and payable pursuant to their terms. Seller
will not take any action, directly or indirectly, that is designed or intended
to have the effect of discouraging any supplier, distributor or customer of the
Business from maintaining the same relationship with Buyer after the Closing as
it maintained with Seller prior to Closing.

(c) Access to Administrative Employees. From the Closing Date until forty-five
(45) days following the Closing Date, Seller will provide reasonable services of
Seller’s administrative employees and any other key employees not hired by Buyer
to assist with the transfer to and use by Buyer of the Purchased Assets.

(d) Transfer of Quality Assurance System. From the Closing Date until forty-five
(45) days following the Closing Date, Seller will cooperate with Buyer and take
commercially reasonable actions to support the transfer of Seller’s quality
assurance system to Buyer or any Third Party designated by Buyer, including
without limitation coordinating such transfer with any necessary Third Parties.

(e) Inquiries. Seller agrees, for a period of one hundred eighty (180) days
following the Closing Date, to use good faith efforts to redirect to Buyer all
inquiries concerning the Business made by any Person to Seller or any of its
agents or representatives.

8.10 Delivery or Destruction of Copies. Promptly after transfer of the Purchased
Assets to Buyer, and in no event later than sixty (60) days following the
Closing Date, Seller will determine whether any Purchased Assets or copies of
Purchased Assets remain in Seller’s or its employees’ or agents’ possession
(including without limitation information stored on computer hardware)
(collectively, the “Remaining Assets”). Seller will deliver to Buyer or destroy
all Remaining Assets and will provide to Buyer a certificate signed by a duly
authorized officer of Seller certifying such delivery or destruction; provided,
however, that Seller may destroy, rather than deliver, only those Remaining
Assets that are exact copies of the Purchased Assets delivered to Buyer.

 

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8.11 Non-Competition. As of the Closing Date and for a period of five (5) years
thereafter, Seller covenants that Seller and each of the Key Executives will
not, either by themselves or with, through or for the benefit of any Affiliate,
licensee, or Third Party, make, use, sell, offer to sell, import, export, or
otherwise develop or commercialize any nerve ablation devices; provided,
however, that if Buyer enters into a license agreement with AHI as contemplated
in the letter of intent dated as of the date of this Agreement sent by Buyer to
AHI, then Seller and each of the Key Executives may engage in such activities,
but only through or for the benefit of AHI, or its wholly-owned subsidiaries or
licensees and solely in the AHI Field. The Parties acknowledge that the
restriction contained in this Section 8.11 is reasonable, valid, and necessary
for the adequate protection of Buyer’s business and that Buyer would not have
entered into this Agreement without the protection afforded it by this
Section 8.11. Notwithstanding the foregoing, the special exception provided on
the signature page of this Agreement for Mr. Janssen will qualify the
requirements of this Section 8.11 as they apply to Mr. Janssen.

9. Indemnification; Survival.

9.1 Indemnification of Buyer. Subject to the provisions of this Section 9,
Seller shall indemnify and hold harmless Buyer, its stockholders, and its
representatives (collectively, the “Buyer Indemnitees”), from and against any
and all damage, loss, liability and expense (including without limitation
reasonable expenses of investigation and reasonable attorneys’ and consultants’
fees and expenses in connection with any action, suit or proceeding or
settlement of any of the foregoing) (collectively, “Losses”) incurred or
suffered by a Buyer Indemnitee arising out of:

(a) any breach of the representations and warranties of Seller set forth in this
Agreement;

(b) any breach of any covenant or agreement of Seller set forth in this
Agreement or in any certificate, instrument, or other document delivered
pursuant to this Agreement;

(c) any failure to comply with laws relating to bulk transfers or bulk sales
with respect to the transactions contemplated by this Agreement;

(d) claims by Seller’s or AHI’s stockholders or Seller’s or AHI’s current or
former employees that are related to this Agreement, the JNJ APA, or the
transactions contemplated herein and therein; and

(e) the Retained Liabilities.

Notwithstanding any other provision of this Agreement, the remedies provided for
in this Section 9 shall constitute the sole and exclusive remedy of Buyer and
any other Buyer Indemnitee for any post-Closing claims made in connection with
this Agreement or any other Losses as described in this Section 9.1, except for
the actual fraud of Seller.

 

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9.2 Indemnification of Seller. Subject to the provisions of this Section 9,
Buyer shall indemnify and hold harmless Seller, its stockholders, and its
representatives (collectively, the “Seller Indemnitees”), from and against any
and all Losses incurred or suffered by a Seller Indemnitee arising out of:

(a) any breach of the representations and warranties of Buyer set forth in this
Agreement;

(b) any breach of any covenant or agreement of Buyer set forth in this Agreement
or in any certificate, instrument, or other document delivered pursuant to this
Agreement;

(c) the ownership or operation of the Purchased Assets or Business after the
Closing; and

(d) the Assumed Liabilities.

Notwithstanding any other provision of this Agreement, the remedies provided for
in this Section 9 shall constitute the sole and exclusive remedy of Seller and
any other Seller Indemnitee for any post-Closing claims made in connection with
this Agreement or any other Losses as described in this Section 9.2, except for
the actual fraud of Buyer.

9.3 Limitations on Indemnification.

(a) Notwithstanding anything in Section 9.1 to the contrary, Seller shall not be
obligated to indemnify Buyer or any other Buyer Indemnitee until aggregate
Losses of Buyer and such Buyer Indemnitees under Section 9.1 have exceeded the
Basket Amount, in which case Buyer and the other Buyer Indemnitees shall be
entitled to indemnification for the total amounts of such Losses.
Notwithstanding the immediately preceding sentence, Buyer and Buyer’s
Indemnitees shall be entitled to recover for, and the Basket Amount shall not
apply as a threshold to, (i) any Losses arising or resulting from fraud or
fraudulent misrepresentation with respect to representations and warranties of
Seller contained in this Agreement; or (ii) any liabilities for indemnification
under Section 9.1(c), 9.1(d), or 9.1(e).

(b) Notwithstanding anything in Section 9.2 to the contrary, Buyer shall not be
obligated to indemnify Seller or any other Seller Indemnitee until aggregate
Losses of Seller and such Seller Indemnitees under Section 9.2 have exceeded the
Basket Amount, in which case Seller and the other Seller Indemnitees shall be
entitled to indemnification for the total amounts of such Losses.
Notwithstanding the immediately preceding sentence, Seller and Seller’s
Indemnitees shall be entitled to recover for, and the Basket Amount shall not
apply as a threshold to, (i) any Losses arising or resulting from fraud or
fraudulent misrepresentation with respect to representations and warranties of
Buyer contained in this Agreement; (ii) Buyer’s obligations to pay the Purchase
Price (including any portion thereof to be paid after the Closing, such as the
Royalty Consideration or Success Milestone); (iii) any liabilities for
indemnification under Section 9.2(c) or 9.2(d); or (iv) any liability of Buyer
under Section 2.10 (Transfer Taxes).

(c) The maximum liability of Seller for any Losses in the aggregate under
Section 9.1(a) shall not exceed eight million dollars ($8,000,000), except that
there shall be no such limitation on Losses exceeding such amount that arise as
a result of (i) a breach of the

 

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representations and warranties in Section 3.1 (Authority and Binding Effect),
3.2 (Organization and Standing) or 3.10(i) or 3.10(iii) (Conflicts; Consents);
(ii) intentional, knowing or willful breach of this Agreement, fraud, or similar
circumstances; or (iii) (for the avoidance of doubt) indemnification under
Sections 9.1(b), 9.1(c), 9.1(d), or 9.1(e).

(d) No claim for indemnification shall be made pursuant to Section 9.1(a) after
one year from the Closing Date; provided, however, that claims for
indemnification under Section 9.1(a) may be made for up to three (3) years from
the Closing Date for Losses that arise as a result of a breach of the
representations and warranties in Section 3.7 (Transferred Contracts) and
Section 3.8 (Intellectual Property). Notwithstanding the foregoing, any such
claim for indemnification shall continue as to any matter as to which a claim is
submitted in writing to Seller prior to such one or three-year period and
identified as a claim for indemnification pursuant to this Agreement, until such
time as such claims and matters are resolved. In addition, any such claim for
indemnification may be brought at any time to the extent it is based upon or
involves (i) fraud by the Indemnifying Party or (ii) claims made under
Section 9.1(a) for a breach of Section 3.1 (Authority and Binding Effect), 3.2
(Organization and Standing) or 3.10(i) or 3.10(iii) (Conflicts; Consents).

(e) Subject to the limitations set forth at this Section 9.3, Buyer may offset
against the Royalty Consideration and Success Milestone, as and when the Royalty
Consideration and/or Success Milestone becomes due and payable, any amounts owed
to Buyer for indemnification under Section 9.1.

(f) Amounts available pursuant to the Escrow Agreement and the royalty offset
described in Section 9.3(e) shall be Buyer’s only recourse for any liability of
Seller under Section 9.1(a), except in the case of (i) intentional, knowing or
willful breach of any representation, warranty, or covenant in this Agreement;
(ii) fraud or similar circumstances; or (iii) claims made under Section 9.1(a)
for a breach of Section 3.1 (Authority and Binding Effect), 3.2 (Organization
and Standing) or 3.10(i) or 3.10(iii) (Conflicts; Consents).

(g) Subject to the limitations set forth at Section 8.3 of the JNJ APA, Buyer
may also offset against the Royalty Consideration and Success Milestone, as and
when the Royalty Consideration and/or Success Milestone becomes due and payable,
any amounts owed to Buyer by JNJ for indemnification under Section 8.1 of the
JNJ APA. Amounts available pursuant to the Escrow Agreement will also be
available to satisfy any liability of JNJ to Buyer under Section 8.1 of the JNJ
APA.

9.4 Procedure. A Party seeking indemnification (the “Indemnitee”) will promptly
notify the other Party (the “Indemnifying Party”) in writing of a claim or suit;
provided that an Indemnitee’s failure to give such notice or delay in giving
such notice will not affect such Indemnitee’s right to indemnification under
this Section 9 except to the extent that the Indemnifying Party has been
prejudiced by such failure or delay. The Indemnitee has the right to participate
(a) at its own expense in the claim or suit with counsel of its own choosing and
(b) in selecting counsel to be used by the Indemnifying Party in such claim or
suit. The Indemnifying Party will consult with the Indemnitee in good faith with
respect to all non-privileged aspects of the defense strategy. The Indemnitee
will cooperate with the Indemnifying Party as reasonably

 

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requested, at the Indemnifying Party’s sole cost and expense. The Indemnifying
Party will not settle any claim or suit without the Indemnitee’s prior written
consent unless such settlement is limited to the payment of cash by the
Indemnifying Party and contains a full release of the Indemnitee.

10. Miscellaneous.

10.1 Public Announcements. Neither Party shall make any public announcements
concerning matters concerning this Agreement or the JNJ APA or the negotiation
thereof without the prior written consent of the other Party unless such
disclosure is required by law, in which case the announcing Party shall provide
the other Party with reasonable notice of such disclosure.

10.2 Assignment. This Agreement and the rights and obligations hereunder may
only be assigned by a Party upon the written consent of the other Party, and the
obligations of such transferring Party will then transfer to the acquiring party
upon any such assignment; provided, however, Seller may assign this Agreement
and the rights and obligations hereunder without the consent of Buyer to a
liquidating trust established by Seller or its stockholders; and provided,
further, that a change of control, merger, and/or purchase of substantially all
of the assets of either Party (or, in the case of Buyer, substantially all of
the assets relating to the Product) shall not constitute an assignment requiring
consent of the other Party. This Agreement will be binding upon the successors
and permitted assigns of the Parties and the name of a Party appearing herein
will be deemed to include the names of such Party’s successors and permitted
assigns to the extent necessary to carry out the intent of this Agreement.

10.3 Confidentiality. Each Party hereby agrees, and agrees to cause its
stockholders, members, and representatives, to keep the terms of this Agreement,
the JNJ APA, and each of the Ancillary Agreements confidential and will treat
and safeguard such terms with the same degree of care with which it treats its
own confidential information and to limit access to such terms to such
employees, consultants, representatives and professional advisors of such Party
who reasonably require such access in connection with the activities
contemplated by this Agreement or otherwise to administer the terms of this
Agreement. To the extent practicable, in the event that a Party is required to
disclose such terms pursuant to any law, regulation, or judicial or
administrative directive, such Party will promptly notify the other Party in
order to allow the other Party a reasonable period of time to obtain protective
or confidential treatment of such terms before they are disclosed. Either Party
may disclose the terms of this Agreement and the Ancillary Agreements (i) to the
extent required, in the reasonable opinion of such Party’s legal counsel, to
comply with applicable laws, including, without limitation, the rules and
regulations promulgated by the United States Securities and Exchange Commission;
and (ii) in connection with a prospective acquisition, merger, financing, or
license for such Party, to prospective acquirers or merger candidates or to
existing or potential investors or licensees; provided that prior to such
disclosure each such candidate or investor will agree to be bound by obligations
of confidentiality and non-use at least equivalent in scope to those set forth
in this Section 10.3. Each Party acknowledges that it will be impossible to
measure in money the damage to the other Party if such Party fails to comply
with the obligations imposed by this Section 10.3, and that, in the event of any
such failure, the non-disclosing Party will not have an adequate remedy at law
or in damages. Accordingly, each Party agrees that injunctive relief or other
equitable remedy, in addition to

 

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remedies at law or damages, is an appropriate remedy for any such failure and
will not oppose the granting of such relief on the basis that the disclosing
Party has an adequate remedy at law. Each Party agrees that it will not seek,
and agrees to waive any requirement for, the securing or posting of a bond in
connection with the non-disclosing Party seeking or obtaining such equitable
relief.

10.4 Severability. Any provision of this Agreement which is illegal, invalid or
unenforceable shall be ineffective to the extent of such illegality, invalidity
or unenforceability, without affecting in any way the remaining provisions
hereof.

10.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
executed in and to be performed in that jurisdiction, without giving effect to
its rules regarding conflicts of laws.

10.6 Entire Agreement; Amendment. This Agreement, the JNJ APA, the Exhibits and
Schedules hereto and thereto, and each additional agreement and document to be
executed and delivered pursuant hereto constitute all of the agreements of the
Parties with respect to, and supersede all prior agreements and understandings
relating to the subject matter of, this Agreement or the transactions
contemplated by this Agreement. This Agreement may not be modified or amended
except by a written instrument specifically referring to this Agreement signed
by the parties hereto.

10.7 Waiver. No waiver by one Party of the other Party’s obligations, or of any
breach or default hereunder by any other Party, shall be valid or effective,
unless such waiver is set forth in writing and is signed by the party giving
such waiver; and no such waiver shall be deemed a waiver of any subsequent
breach or default of the same or similar nature or any other breach or default
by such other Party.

10.8 Interpretation; Headings. This Agreement is the result of arms-length
negotiations between the Parties hereto and no provision hereof, because of any
ambiguity found to be contained therein or otherwise, shall be construed against
a Party by reason of the fact that such Party or its legal counsel was the
draftsman of that provision. The section, subsection and any paragraph headings
contained herein are for the purpose of convenience only and are not intended to
define or limit or affect, and shall not be considered in connection with, the
interpretation of any of the terms or provisions of this Agreement. The plural
will be deemed to include the singular, and the singular will be deemed to
include the plural. The words “include,” “includes,” or “including” mean
including, by way of example and not by way of limitation. Words such as
“herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a
whole and not merely to a section or paragraph in which such words appear,
unless the context otherwise requires. The words “shall” and “will” are deemed
to be synonyms.

10.9 Counterparts. This Agreement may be executed in separate counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

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10.10 Notices. Unless otherwise provided herein, any notice, report, payment, or
document to be given by one Party to the other will be in writing and will be
deemed given when actually received or when delivered personally, mailed by
certified or registered mail, postage prepaid (such mailed notice to be
effective on the date that is five (5) Business Days after the date of mailing),
sent by reputable overnight courier (such notice sent by courier to be effective
one (1) Business Day after it is deposited with such courier), or by electronic
facsimile (such notice sent by facsimile to be effective on the first Business
Day after transmission, provided that the successful transmission of the
facsimile has been confirmed) to the address below, or to such other place as
any Party may designate as to itself by written notice to the other Party.

If to Seller:

Advanced Cosmetic Intervention, Inc.

6025 Highland Hills Court

Ft. Collins, Colorado 80528

Facsimile: (970) 377-9812

Attention: David Stevens

with a copy to:

Heller Ehrman LLP

Times Square Tower

7 Times Square

New York, NY 10036

Attn: Stephen Davis

Fax: (212) 763-7600

If to Buyer:

BioForm Medical, Inc.

1875 South Grant St., Suite #110

San Mateo, CA 94402

Attn: Chief Executive Officer

Fax: (650) 286-4090

with a copy to:

Ropes & Gray LLP

525 University Avenue, Suite 300

Palo Alto, CA 94301-1917

Attn: David J. Saul

Fax: (650) 566-4232

10.11 Dispute Resolution. In the event that any dispute or controversy arises
between the Parties out of or relating to this Agreement or any Ancillary
Agreement (a “Dispute”), a Party shall notify the other Party in writing of the
existence of the Dispute, and the Parties shall meet and negotiate in good faith
to attempt to resolve the matter. If such efforts do not within thirty (30) days
resolve the Dispute, the Dispute shall be resolved by binding arbitration as

 

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provided in this Section 10.11. Buyer and Seller shall each appoint an
arbitrator of choice from a list of arbitrators recognized by the American
Arbitration Association. The appointed arbitrators shall appoint a third
arbitrator from the list, and the three arbitrators shall hear the Parties and
settle the Dispute. The proceedings shall be conducted under and governed by the
Commercial Rules of the American Arbitration Association, as in effect from time
to time. All arbitration hearings shall be conducted in the jurisdiction
selected by the Party not bringing the action, which jurisdiction shall either
be the City and County of San Francisco, California or the City and County of
Denver, Colorado. All applicable statutes of limitation shall apply to any
Dispute. The arbitrators shall have no power to award punitive or exemplary
damages or to ignore or vary the terms of this Agreement, and shall be bound to
apply controlling law. The arbitrators may award costs and expenses incurred in
connection with a Dispute (including reasonable attorney’s fees) to a Party, if
it is determined by the arbitrator that the other Party acted in bad faith. A
judgment upon the award may be entered in any court having jurisdiction.

10.12 GAAP. All questions of accounting under this Agreement shall be resolved
under generally accepted accounting principles as recognized by the American
Institute of Certified Public Accountants, as in effect from time to time,
consistently applied and maintained on a consistent basis for the applicable
Person (or Persons on a consolidated basis, as the case may be) throughout the
period indicated and consistent with such Person’s prior financial practices.

10.13 JNJ Agreement. Buyer hereby agrees that it will not amend the JNJ APA, or
waive any provisions thereof, without Seller’s prior written consent.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, each of Buyer and Seller has caused a duly authorized
representative to execute this Asset Purchase Agreement on the date first
written above.

 

BIOFORM MEDICAL, INC. By:   /s/ Steven L. Basta Name:   Steven L. Basta Title:  
Chief Executive Officer

 

ADVANCED COSMETIC INTERVENTION, INC. By:   /s/ Paul Maroon Name:   Paul Maroon
Title:   Chief Executive Officer

[Signature Page to Asset Purchase Agreement]

 

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To induce Buyer to enter into this Agreement, and in consideration thereof, each
of the undersigned, on behalf of himself as an individual, hereby agrees to
comply with the non-competition covenants set forth in Section 8.11. Each
individual below agrees that as of the Closing Date and for a period of five
(5) years thereafter, each individual will not, either by himself or with,
through or for the benefit of any Affiliate, licensee, or Third Party, make,
use, sell, offer to sell, import, export, or otherwise develop or commercialize
any nerve ablation devices; provided, however, that if Buyer enters into a
license agreement with AHI as contemplated in the letter of intent dated as of
the date of this Agreement sent by Buyer to AHI, then Seller and each of the Key
Executives may engage in such activities, but only through or for the benefit of
AHI, or its wholly-owned subsidiaries or licensees and solely in the AHI Field.
The undersigned acknowledge that the restrictions contained above and in
Section 8.11 are reasonable, valid, and necessary for the adequate protection of
Buyer’s business and that Buyer would not have entered into this Agreement
without the protection afforded it by these covenants.

 

By:   /s/ James Newman Name:   James Newman Date:   April 29, 2008

 

By:   /s/ Jim Jones Name:   Jim Jones Date:   April 29, 2008

 

By:   /s/ Paul Maroon Name:   Paul Maroon Date:   April 29, 2008

 

By:   /s/ David Stevens Name:   David Stevens Date:   April 29, 2008

[Signature Page to Asset Purchase Agreement]

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To induce Buyer to enter into this Agreement, and in consideration thereof, the
undersigned, on behalf of himself as an individual, hereby agrees to comply with
the non-competition covenants set forth on the previous page and in
Section 8.11. The undersigned acknowledges that the restrictions contained in
Section 8.11 and on the previous page are reasonable, valid, and necessary for
the adequate protection of Buyer’s business and that Buyer would not have
entered into this Agreement without the protection afforded it by these
covenants.

Notwithstanding the foregoing, the undersigned may request of Buyer special
permission to consult for a Third Party entity engaged in the development and/or
commercialization of nerve ablation for applications for OB, prostate surgery
and related areas (to be specified at the time of such request). Buyer will
consider any such request in good faith, and will deny such request only if, in
Buyer’s reasonable judgment, such activity would be competitive with Buyer’s
business interests. As a condition to granting any such permission, however,
Buyer will require that such Third Party agrees in writing, using the form
attached as Exhibit G, prior to the initiation of any such consulting activity,
that any technology or consulting activity in which the undersigned is in any
way involved will be used only for those applications. Buyer’s special
permission for consulting activities for such applications will be granted to
the undersigned on a case-by-case basis only after receipt by Buyer of such
signed agreement from such Third Party entity.

In the event that Buyer grants the special permission described above, all
products resulting from the undersigned’s consulting activities (each, an “Other
Product”) will provide for a mutual incompatibility with BioForm products so
that: (a) the Other Product’s software is incompatible with BioForm products;
(b) there is mechanical differentiation so that the Other Product is physically
incompatible with BioForm products; (c) there is a built-in electrical
incompatibility so that it is impossible to utilize disposables from a BioForm
product on the Other Product or a disposable from the Other Product on a BioForm
product; (d) the RF energy profile of the Other Product will produce
therapeutically differentiated RF deliveries than BioForm products; (e) all
disposable-based Other Products will utilize a differentiated connector further
preventing plug in or use of the Other Product with a BioForm product; and
(f) the load curve of the Other Product will be different to ensure
physiological and further incompatibility with BioForm products.

In addition, notwithstanding the foregoing, the undersigned will be free to
develop products solely for cardiology applications (including interventional
cardiology including treatment of CTOs, electrophysiology and cardiothoracic
surgery); provided that (a) all such products will provide for a mutual
incompatibility with BioForm products by complying with the requirements in
sections (a) through (f) of the immediately preceding paragraph (for the
purposes of such paragraph, each such cardiology product will be deemed an
“Other Product”); and (b) all such products will (i) involve intravascular based
systems, (ii) utilize catheters introduced through blood vessels into the heart,
and (iii) utilize newly developed RF generators and new software and hardware
designed specifically for cardiology applications.

 

By:   /s/ Michael Janssen Name:   Michael Janssen Date:   April 29, 2008

[Signature Page to Asset Purchase Agreement]

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LOGO [g76218g80v68.jpg]

EXHIBIT A

ESCROW AGREEMENT

among

BIOFORM MEDICAL, INC.

ADVANCED COSMETIC INTERVENTION, INC.

as Seller

and

THE BANK OF NEW YORK

Dated as of April 29, 2008

ACCOUNT NUMBER(S):

SHORT TITLE OF ACCOUNT:

 

 

 

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ESCROW AGREEMENT made this 29th day of April, 2008, by and among THE BANK OF NEW
YORK (“Escrow Agent”), ADVANCED COSMETIC INTERVENTION, INC., (the “Seller”), and
BIOFORM MEDICAL, INC. (the “Buyer”, and for ease of reference collectively with
the Seller, the “Depositors”). Reference is made to that certain Asset Purchase
Agreement (the “ACI APA”) of even date herewith between the Buyer and the Seller
and to that certain Asset Purchase Agreement (the “JNJ APA”) of even date
herewith between the Buyer and JNJ Technology Holdings, LLC (“JNJ”).

The parties hereby agree that, in consideration of the mutual promises and
covenants contained herein, Escrow Agent shall hold in escrow and shall
distribute Escrow Property (as defined herein) in accordance with and subject to
the following Instructions and Terms and Conditions:

I. INSTRUCTIONS:

 

1. Escrow Property

The property and/or funds deposited or to be deposited with Escrow Agent by the
Buyer shall be as follows: [*] (the “Escrow Amount”).

The foregoing property and/or funds, plus all interest, dividends and other
distributions and payments thereon (collectively the “Distributions”) received
by Escrow Agent, less any property and/or funds distributed or paid in
accordance with this Escrow Agreement, are collectively referred to herein as
the “Escrow Property”.

 

2. Investment of Escrow Property

The Escrow Agent shall invest or reinvest the Escrow Property without
distinction between principal and income, in The Bank of New York’s Deposit
Reserve (the “BNYDR”) unless otherwise directed by written instrument signed by
the Depositors.

The Escrow Agent shall have no liability for any loss arising from or related to
any such investment other than in accordance with Section 3 of the Terms and
Conditions.

 

3. Distribution of Escrow Property

The Escrow Agent is directed to hold and distribute the Escrow Property as set
forth in this Section 3.

 

  (a) Other than as provided in clauses (b) and (c) below, the Escrow Agent
shall distribute the Escrow Property only in accordance with (i) a written
instrument delivered to the Escrow Agent that is executed by the Seller and the
Buyer and that instructs the Escrow Agent as to the disbursement of some or all
of the Escrow Property, or (ii) a final non-appealable order of a court of
competent jurisdiction, a copy of which is delivered to the Escrow Agent by
either the Seller or the Buyer and to the other party hereto, that instructs the
Escrow Agent as to the disbursement of some or all of the Escrow Property.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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  (b) In the event that the Buyer delivers a written certification to the Escrow
Agent and the Seller asserting that the Buyer is entitled to receive all or any
portion of the Escrow Amount in respect of (i) any Losses (as defined in the ACI
APA) for which any Buyer Indemnitee (as defined in the ACI APA) is entitled to
indemnification by the Seller under Section 9 of the ACI APA or (ii) any Losses
(as defined in the JNJ APA) for which any Buyer Indemnitee (as defined in the
JNJ APA) is entitled to indemnification by JNJ under Section 8 of the JNJ APA;
which such certification shall include a description of the amount and nature of
such Losses (including reasonable detail of the facts giving rise to each claim,
if known, and the provision of the ACI APA or JNJ APA under which the claim
arises) and the Seller does not, in a written notice delivered to the Buyer and
the Escrow Agent within thirty (30) days after the delivery of the Buyer’s
notice, dispute such assertion, then the Escrow Agent shall automatically
distribute to the Buyer an amount equal to the portion of the Escrow Amount that
the Buyer asserted it is entitled to receive in such notice.

 

  (c) On April 29, 2010, the Escrow Agent shall automatically distribute to the
Seller an amount equal to the then remaining Escrow Property less the
Outstanding Claims Amount as of April 28, 2010, if any.

 

  (d) If at least [*] of the Disinterested Shareholders of Seller have approved
in writing the ACI APA and the JNJ APA, then the Buyer and the Seller agree to
execute and deliver to the Escrow Agent a written instrument in accordance with
Section I.3(a)(i) instructing the Escrow Agent to distribute immediately to the
Seller the lesser of (i) [*] or (ii) the remaining Escrow Amount less the
Outstanding Claims Amount as of such date. For purposes of this Escrow
Agreement, “Disinterested Shareholders” means those shareholders of Seller who
are not current board members of ACI, members of JNJ or family members thereof.
The Escrow Agent will not take any action with respect to this Section I.3(d)
unless and until it receives such written instrument.

 

  (e) With respect to written certifications delivered by the Buyer to the
Escrow Agent pursuant to Section I.3(b) on or after April 29, 2009, if the Buyer
and the Seller have not delivered notice to the Escrow Agent to make a
distribution to the Seller in accordance with Section I.3(d) prior to the date
of the certification, then the certification will be subject to the following:
(i) with respect to Losses for which any Buyer Indemnitee may be entitled to
indemnification by Seller under Section 9.1(d) of the ACI APA based on claims by
Seller’s stockholders or employees, Buyer may request distribution of the entire
Escrow Amount then remaining; and (ii) with respect to all other Losses, Buyer
may request distribution of an amount not more than (A) the then remaining
Escrow Amount less (B) [*].

 

  (f) “Outstanding Claims Amount” means, as of a particular date, the sum of all
pending and unpaid claims for indemnification made by Buyer pursuant to
Section 9 of the ACI APA or Section 8 of the JNJ APA, as certified to the Escrow
Agent and the Seller in a written instrument executed by the Buyer, which
instrument shall include a description (including reasonable detail of the facts
giving rise to each claim, if known, and the provision of the ACI APA or JNJ APA
under which the claim arises) of the amount and nature of such claims; provided,
however, that it is hereby agreed and acknowledged that any such claims for
indemnification may only be made by Buyer against any remaining Escrow Amount,
and not against any Distributions.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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  (g) Whenever the Escrow Agent will be required to make a payment from the
Escrow Account, the Escrow Agent will pay such amounts by liquidating such
investments of the Escrow Property as will be directed in writing by the
Depositors; provided, however, that if the Depositors have not furnished such
direction to the Escrow Agent upon delivery of the certificate or other
documentation delivered pursuant to this Section 3, the Escrow Agent will pay
such amounts by liquidating such investments of the Escrow Property as will be
determined by the Escrow Agent in its sole discretion.

 

  (h) Amounts distributed pursuant to this Section 3 shall be paid to the
applicable party in accordance with wire instructions furnished by such party to
the Escrow Agent.

 

4. Addresses

Notices, instructions and other communications shall be sent to Escrow Agent,
Corporate Trust Administration, 101 Barclay Street, 8W, New York NY 10286 Attn.:
Odell Romeo, facsimile – 212-815-5875/5877 and to the Depositors as follows:

 

To the Seller at:

 

Advanced Cosmetic Intervention, Inc.

6025 Highland Hills Court

Ft. Collins, Colorado 80528

Facsimile: (970) 377-9812

Attention: David Stevens

 

with a copy (which shall not constitute notice) to:

 

Heller Ehrman LLP

Times Square Tower, 7 Times Square

New York, NY 10036

Facsimile: (212) 763-7600

Attention: Stephen Davis

  

To the Buyer at:

 

BioForm Medical, Inc.

1875 South Grant St., Suite #110

San Mateo, CA 94402

Facsimile: (650) 286-4090

Attention: Chief Executive Officer

 

with a copy (which shall not constitute notice) to:

 

Ropes & Gray LLP

525 University Avenue, Suite 300

Palo Alto, CA 94301

Facsimile: (650) 566-4232

Attention: David J. Saul

 

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Notices or other communications hereunder shall be in writing and shall be
delivered by hand or sent by facsimile, or sent, postage prepaid, by registered,
certified or express mail, or overnight courier service, or electronic
transmission, i.e. “pdf” (except in the case of notices or communications to
ACI, which shall not be delivered by electronic transmission), and shall be
deemed given when so delivered by hand, or the next business day if sent by
facsimile (transmission confirmed), or if mailed, five business days after
mailing (one business day in the case of express mail or overnight courier
service) to the addresses set forth above.

 

5. Distribution of Escrow Property Upon Termination

This Escrow Agreement shall be terminated automatically either (a) on the date
on which all Escrow Property has been distributed, or (b) on the later of
(i) April 29, 2010 and (ii) the date on which there is no Outstanding Claims
Amount. The Escrow Agreement may also be terminated at any time by a written
agreement executed by each of the Depositors. Upon termination of this Escrow
Agreement, the Escrow Property then held hereunder, if any, shall be distributed
to the Seller.

 

6. Compensation

 

  (a) Unless waived, the Buyer shall pay the Escrow Agent an annual fee of
$3,500, payable upon execution of this Escrow Agreement and thereafter on each
anniversary date of this Escrow Agreement, provided that the annual fee shall be
waived so long as the Escrow Property is invested in the BNYDR. The annual fee
shall not be pro-rated for any portion of a year, but shall be subject to
pro-ration to the extent the Escrow Property is only invested in the BNYDR for a
portion of a given year.

 

  (b) The Buyer shall pay all activity charges as per Escrow Agent’s current fee
schedule, which is attached as Exhibit 6(b).

 

  (c) Except for amounts to be shared between the Buyer and the Seller as
otherwise provided herein, the Buyer shall be responsible for and shall
reimburse the Escrow Agent upon demand for all reasonable and documented
out-of-pocket expenses which may include, but are not limited to, telephone;
facsimile; courier; copying; postage; supplies; and expenses of foreign
depositaries.

II. TERMS AND CONDITIONS:

 

1. The duties, responsibilities and obligations of the Escrow Agent shall be
limited to those expressly set forth herein and no duties, responsibilities or
obligations shall be inferred or implied. The Escrow Agent shall not be subject
to, nor required to comply with, any other agreement between the Depositors or
to which any Depositor is a party, even though reference thereto may be made
herein, or to comply with any direction or instruction (other than those
contained herein or delivered in accordance with this Escrow Agreement) from any
Depositor or any entity acting on its behalf. The Escrow Agent shall not be
required to, and shall not, expend or risk any of its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder.

 

2. This Escrow Agreement is for the exclusive benefit of the parties hereto and
their respective successors and permitted assigns hereunder, and shall not be
deemed to give, either express or implied, any legal or equitable right, remedy,
or claim to any other entity or person whatsoever.

 

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3. (a) The Escrow Agent shall not be liable for any action lawfully taken or
omitted or for any loss or injury resulting from its actions or its performance
or lack of performance of its duties hereunder in the absence of bad faith,
gross negligence or willful misconduct on its part. In no event shall the Escrow
Agent be liable (i) for acting in accordance with or relying upon any written
instruction, notice, demand, certificate or document from the Depositors
(ii) for any consequential, punitive or special damages, (iii) for the acts or
omissions of its nominees, correspondents, designees, subagents or
subcustodians, or (iv) for an amount in excess of the value of the Escrow
Property.

(b) The Escrow Agent may consult legal counsel of its own choosing in the event
of any dispute or question as to the construction of this Escrow Agreement, or
the Escrow Agent’s duties hereunder, and the Escrow Agent will incur no
liability and will be fully protected with respect to any action taken or
omitted in good faith in accordance with the opinion and instructions of such
counsel. Notwithstanding anything to the contrary herein, in no event shall the
Escrow Agent be entitled to reimbursement of the expenses of such counsel with
respect to any matter arising from the Escrow Agent’s bad faith, gross
negligence or willful misconduct.

(c) The Escrow Agent shall not incur any liability for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of the Escrow Agent (including but not limited to
any act or provision of any present or future law or regulation or governmental
authority, any act of God or war, or the unavailability of the Federal Reserve
Bank wire or telex or other wire or communication facility).

(d) If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects the Escrow Property (including
but not limited to orders of attachment or garnishment or other forms of levies
or injunctions or stays relating to the transfer of Escrow Property), the Escrow
Agent is authorized to comply therewith in any manner as it or its legal counsel
of its own choosing deems appropriate; and if the Escrow Agent complies with any
such judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Escrow Agent shall not be liable to any
of the parties hereto or to any other person or entity even though such order,
judgment, decree, writ or process may be subsequently modified or vacated or
otherwise determined to have been without legal force or effect.

 

4. Unless otherwise specifically set forth herein, the Escrow Agent shall
proceed as soon as practicable to collect any checks or other collection items
at any time deposited hereunder. All such collections shall be subject to the
Escrow Agent’s usual collection practices or terms regarding items received by
the Escrow Agent for deposit or collection. The Escrow Agent shall not be
required, or have any duty, to notify anyone of any payment or maturity under
the terms of any instrument deposited hereunder, nor to take any legal action to
enforce payment of any check, note or security deposited hereunder or to
exercise any right or privilege which may be afforded to the holder of any such
security.

 

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5. The Escrow Agent shall provide to Depositors monthly statements identifying
transactions, transfers or holdings of the Escrow Property and each such
statement shall be deemed to be correct and final upon receipt thereof by the
Depositors unless the Escrow Agent is notified in writing to the contrary within
thirty (30) business days of the date of such statement.

 

6. The Escrow Agent shall not be responsible in any respect for the form,
execution, validity, value or genuineness of documents or securities deposited
hereunder, or for any description therein, or for the identity, authority or
rights of persons executing or delivering or purporting to execute or deliver
any such document, security or endorsement.

 

7. Notices, instructions or other communications shall be in writing and shall
be given to the address set forth in the “Addresses” provision herein (or to
such other address as may be substituted therefor by written notification to the
Escrow Agent or the Depositors). Notices to the Escrow Agent shall be deemed to
be given when actually received by Escrow Agent. The Escrow Agent is authorized
to comply with and rely upon any notices, instructions or other communications
believed by it to have been sent or given by the Depositors or by a person or
persons authorized by the Depositors. Whenever under the terms hereof the time
for giving a notice or performing an act falls upon a Saturday, Sunday, or
banking holiday, such time shall be extended to the next day on which the Escrow
Agent is open for business.

 

8. The Seller and the Buyer shall jointly and severally be liable for and shall
reimburse and indemnify the Escrow Agent and hold the Escrow Agent harmless from
and against any and all claims, losses, liabilities, costs, damages or expenses
(including reasonable attorneys’ fees and expenses) (collectively, “Losses”)
that may be incurred by it as a result of its involvement in any arbitration or
litigation arising from the performance of its duties hereunder, provided,
however, that nothing contained herein shall require the Escrow Agent to be
indemnified for Losses caused by its bad faith, gross negligence or willful
misconduct. The Seller and the Buyer agree that irrespective of any joint and
several liability that either may have to the Escrow Agent under this Escrow
Agreement, as between them, the Buyer shall be liable for one hundred percent
(100%) of any Losses incurred by the Escrow Agent which result in reimbursement
or indemnification under this Section II.8. However, if the arbitration or
litigation involves a dispute between the Buyer and Seller and if the Buyer is
the prevailing party in any such arbitration or litigation, then Seller shall be
liable for one hundred percent (100%) of any Losses incurred by the Escrow Agent
which result in reimbursement or indemnification under this Section II.8.

 

9. (a) Depositors may remove the Escrow Agent at any time by giving to the
Escrow Agent thirty (30) calendar days’ prior notice in writing signed by all
Depositors. The Escrow Agent may resign at any time by giving to the Depositors
thirty (30) calendar days’ prior written notice thereof. Within ten
(10) calendar days after giving the foregoing notice of removal to the Escrow
Agent or receiving the foregoing notice of resignation from Escrow Agent, the
Depositors shall jointly agree on and appoint a successor escrow agent. If a
successor to the escrow agent has not accepted such appointment by the end of
such ten-day period, the Escrow Agent may apply to a court of competent
jurisdiction for the appointment of a successor to the Escrow Agent or for other
appropriate relief. One-half of the costs and expenses (including reasonable
attorneys’ fees and expenses) incurred by the Escrow Agent in connection with
such proceeding shall be paid by each of the Seller and the Buyer.

 

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(b) Upon receipt of the identity of the successor escrow agent, the Escrow Agent
shall either deliver the Escrow Property then held hereunder to the successor
escrow agent, less the Escrow Agent’s fees, costs and expenses or other
obligations owed to the Escrow Agent, or hold such Escrow Property (or any
portion thereof), pending distribution, until all such fees, costs and expenses
or other obligations are paid.

(c) Upon delivery of the Escrow Property to the successor escrow agent, the
Escrow Agent shall have no further duties, responsibilities or obligations
hereunder.

 

10. (a) In the event of any ambiguity or uncertainty hereunder or in any notice,
instruction or other communication received by the Escrow Agent hereunder, the
Escrow Agent may, in its sole discretion, refrain from taking any action other
than retain possession of the Escrow Property, unless the Escrow Agent receives
written instructions, signed by both Depositors, which eliminates such ambiguity
or uncertainty.

(b) In the event of any dispute between or conflicting claims by or among the
Depositors with respect to any Escrow Property, the Escrow Agent shall be
entitled, in its sole discretion, to refuse to comply with any and all claims,
demands or instructions with respect to such Escrow Property so long as such
dispute or conflict shall continue, and the Escrow Agent shall not be or become
liable in any way to the Depositors for failure or refusal to comply with such
conflicting claims, demands or instructions. The Escrow Agent shall be entitled
to refuse to act until, in its sole discretion, either (i) such conflicting or
adverse claims or demands have been determined by a final order, judgment or
decree of a court of competent jurisdiction, which order, judgment or decree is
not subject to appeal, or settled by agreement between the conflicting parties
as evidenced in a writing satisfactory to the Escrow Agent or (ii) the Escrow
Agent has received security or an indemnity satisfactory to it sufficient to
hold it harmless from and against any and all Losses which it may incur by
reason of so acting. The Escrow Agent may, in addition, elect, in its sole
discretion, to commence an interpleader action or seek other judicial relief or
orders as it may deem, in its sole discretion, necessary. The costs and expenses
(including reasonable attorneys’ fees and expenses) incurred in connection with
such proceeding shall be paid by, and shall be deemed a joint and several
obligation of, the Depositors.

 

11. This Agreement shall be interpreted, construed, enforced and administered in
accordance with the internal substantive laws (and not the choice of law rules)
of the State of New York. Each party hereto hereby submits to the personal
jurisdiction of and each agrees that all proceedings relating hereto shall be
brought in courts located within the City and State of New York. Each party
hereto hereby waives the right to trial by jury and to assert counterclaims in
any such proceedings. To the extent that in any jurisdiction any party hereto
may be entitled to claim, for itself or its assets, immunity from suit,
execution, attachment (whether before or after judgment) or other legal process,
each hereby irrevocably agrees not to claim, and hereby waives, such immunity.
Each party hereto waives personal service of process and consents to service of
process by certified or registered mail, return receipt requested, directed to
it at the address last specified for notices hereunder, and such service shall
be deemed completed ten (10) calendar days after the same is so mailed.

 

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12. Except as otherwise permitted herein, this Escrow Agreement may be modified
only by a written amendment signed by all the parties hereto, and no waiver of
any provision hereof shall be effective unless expressed in a writing signed by
the party to be charged.

 

13. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall not
preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.

 

14. Each Depositor and the Escrow Agent hereby represents and warrants (a) that
this Escrow Agreement has been duly authorized, executed and delivered on its
behalf and constitutes its legal, valid and binding obligation and (b) that the
execution, delivery and performance of this Escrow Agreement by such party does
not and will not violate any applicable law or regulation.

 

15. The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability of any
other provision; and if any provision is held to be enforceable as a matter of
law, the other provisions shall not be affected thereby and shall remain in full
force and effect.

 

16. This Agreement shall constitute the entire agreement of the parties with
respect to the subject matter and supersedes all prior oral or written
agreements in regard thereto.

 

17. This Agreement shall terminate as provided for herein. The provisions of
these Terms and Conditions shall survive termination of this Escrow Agreement
and/or the resignation or removal of the Escrow Agent.

 

18. No printed or other material in any language, including prospectuses,
notices, reports, and promotional material which mentions “The Bank of New York”
by name or the rights, powers, or duties of the Escrow Agent under this
Agreement shall be issued by any other parties hereto, or on such party’s
behalf, without the prior written consent of Escrow Agent, except as required by
applicable law; provided however, the parties may mention “The Bank of New York”
by name or the rights, powers or duties of the Escrow Agent under this Agreement
in the ACI APA, JNJ APA, Seller shareholder consents, JNJ shareholder consents
and Seller shareholder appraisal rights notice.

 

19. The headings contained in this Agreement are for convenience of reference
only and shall have no effect on the interpretation or operation hereof.

 

20. This Escrow Agreement may be executed by each of the parties hereto in any
number of counterparts, each of which counterpart, when so executed and
delivered, shall be deemed to be an original and all such counterparts shall
together constitute one and the same agreement.

 

21.

This Escrow Agreement and the rights of the parties hereunder may not be
assigned and shall be binding on and inure to the benefit of the parties hereto,
the legal representatives and successors of Buyer and the Escrow Agent, and the
legal representatives and

 

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successors of the Seller, provided that Seller may assign this Escrow Agreement
and the rights of the parties hereunder to a liquidating trust established by
Seller or its shareholders, provided further that the Buyer may (i) assign its
rights under this Escrow Agreement to any affiliate, (ii) make a collateral
assignment of this Escrow Agreement and its rights hereunder and its interests
herein to its lenders which, under certain circumstances, would permit such
lenders to enforce this Escrow Agreement on behalf of the Buyer, and
(iii) assign this Escrow Agreement to any entity which acquires substantially
all of the assets of the Buyer, by merger consolidation, or otherwise, and
agrees to be bound hereto as a successor to the Buyer.

 

22. The Escrow Agent does not have any interest in the Escrow Property deposited
hereunder but is serving as escrow holder only and having only possession
thereof. The Buyer shall pay or reimburse the Escrow Agent upon request for any
transfer taxes or other taxes relating to the Escrow Property incurred in
connection herewith and shall indemnify and hold harmless the Escrow Agent for
any amounts that it is obligated to pay in the way of such taxes. Any payments
of income from this Escrow Account shall be subject to withholding regulations
then in force with respect to United States taxes. The parties hereto will
provide the Escrow Agent with appropriate W-9 forms for tax I.D., number
certifications, or W-8 forms for non-resident alien certifications. It is
understood that the Escrow Agent shall be responsible for income reporting only
with respect to income earned on investment of funds which are a part of the
Escrow Property and is not responsible for any other reporting. It is expressly
agreed and understood that the Escrow Property shall be treated as a grantor
trust of the Buyer for tax purposes, provided, however, that the Escrow Agent
shall not distribute any amounts from the Escrow Fund except as expressly
provided in this Agreement. Accordingly, for tax purposes, the assets and all
earnings on the assets shall be considered owned by the Buyer and shall be
reported as such for all tax reporting purposes. In particular, it is agreed
that all interest or other income earned on the Escrow Property shall be treated
as earned by the Buyer and shall be reported by the Escrow Agent to the Buyer as
income of the Buyer. This Section and Section 8 shall survive notwithstanding
any termination of this Escrow Agreement or the resignation of the Escrow Agent.

 

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IN WITNESS WHEREOF, each of the parties has caused this Escrow Agreement to be
executed by a duly authorized officer as of the day and year first written
above.

 

BIOFORM MEDICAL, INC.

By:   /s/ Steven L. Basta   Name: Steven L. Basta   Title: Chief Executive
Officer

ADVANCED COSMETIC INTERVENTION, INC.

By:   /s/ Paul Maroon   Name: Paul Maroon   Title: Chief Executive Officer THE
BANK OF NEW YORK, as Escrow Agent By:   /s/ Odell Romeo   Name: Odell D. Romeo  
Title: Assistant Vice President

Escrow Agreement Signature Page

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EXHIBIT B

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of April 29, 2008,
by and between BioForm Medical, Inc., a Delaware corporation (“Buyer” or
“BioForm”) and JNJ Technology Holdings, LLC, a Colorado limited liability
company (“Seller” or “JNJ”). JNJ and BioForm may be referred to herein
individually as a “Party” and collectively as the “Parties”. Certain other
capitalized terms used in this Agreement are defined in Section 1.

WHEREAS, on even date herewith, Buyer and Advanced Cosmetic Intervention, Inc.,
a Colorado corporation (“ACI”) will enter into the ACI APA (as defined below)
whereby Buyer will purchase from ACI substantially all of the assets of ACI,
including those assets related to the business of selling nerve ablation
devices;

WHEREAS, Seller has entered into a license agreement with ACI under which Seller
granted to ACI a license under certain Intellectual Property Rights owned by
Seller;

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to
BioForm, substantially all of the assets of Seller, including those intellectual
property rights currently licensed to ACI;

WHEREAS, the individual principals of Seller are also significant shareholders
of ACI;

WHEREAS, Advanced Headache Intervention, Inc., a Colorado Corporation (“AHI”) is
an entity that was spun off from Seller to commercialize nerve ablation devices
in the field of pain management; and

WHEREAS, Buyer and Seller intend that Buyer will negotiate an agreement with AHI
following the Closing with respect to selling nerve ablation devices in the
field of pain management.

NOW THEREFORE, in consideration of the terms, covenants, and conditions
hereinafter set forth, the Parties hereto agree as follows:

1. Definitions. For the purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings set forth below
and grammatical variations of such terms shall have corresponding meanings:

1.1 “ACI” has the meaning given to it in the recitals.

1.2 “ACI APA” means that certain Asset Purchase Agreement, in the form set forth
at Exhibit A, to be entered into between Buyer and ACI on the Closing Date.

1.3 “ACI Product” or “ACI Products” means any and all products of ACI that use
or incorporate any of the Transferred Intellectual Property Rights or any ACI
Transferred Intellectual Property Rights, including any documentation that
accompanies such product when delivered to ACI’s customers such as instructions,
labeling and training materials.

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1.4 “ACI Purchased Assets” means all assets identified as “Purchased Assets” in
the ACI APA.

1.5 “ACI Transferred Intellectual Property Rights” means all assets identified
as “Transferred Intellectual Property Rights” in the ACI APA.

1.6 “Affiliate” means, with respect to any person, any person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such person. For the purposes of this definition,
“control” means the direct or indirect ownership of more than fifty percent
(50%) of the outstanding shares or other voting rights entitled to vote for the
election of directors (or in the case of an entity that is not a corporation,
for the election of the corresponding management authority). Seller shall not be
deemed for any purposes of this Agreement to be an Affiliate of Buyer. Neither
ACI nor AHI shall be deemed for any purpose of this Agreement to be an Affiliate
of Seller.

1.7 “AHI” has the meaning given to it in the recitals.

1.8 “Ancillary Agreements” means the Bill of Sale, the Intellectual Property
Assignments, and all other ancillary agreements to this Agreement.

1.9 “Basket Amount” means $75,000.

1.10 “Books and Records” means all papers and records (in paper or electronic
format) including, without limitation, all correspondence and files related to
the Intellectual Property Rights, including files maintained by intellectual
property lawyers or agents, and copies of nondisclosure agreements signed by
employees and other Third Parties.

1.11 “Business” means the development, manufacture and sale of ACI Products,
either directly to customers or through distributors, licensees or other agents,
as currently conducted by ACI.

1.12 “Business Day” (whether such phrase is capitalized or not) means any day,
other than Saturday, Sunday, or a legal holiday in California, that banks
located in San Francisco, California are open for business.

1.13 “Contract” or “Contracts” means any mortgage, indenture, lease, contract,
covenant, arrangement, agreement, instrument, commitment, purchase order or
license.

1.14 “Encumbrance” or “Encumbrances” means any encumbrance, lien, charge,
hypothecation, pledge, mortgage, adverse claim, option, preemptive right, or
other security interest of any nature, or any contract to create any of the
foregoing.

1.15 “Escrow Agent” means The Bank of New York.

 

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1.16 “Escrow Agreement” means the escrow agreement by and among the Buyer, ACI
and the Escrow Agent in substantially the form of Exhibit B hereto.

1.17 “Existing JNJ-ACI License” means the Technology License Agreement dated as
of July 1, 2004 between Seller and ACI, which will be terminated as of the
Closing Date as described herein.

1.18 “Filed Intellectual Property Rights” means all United States, international
and foreign Intellectual Property Rights that are the subject of an application,
certificate, filing, registration or other document issued, filed with or
recorded by any court, administrative agency or commission or other federal,
state, county, local or foreign governmental authority, instrumentality, agency
or commission.

1.19 “GAAP” means United States generally accepted accounting principles.

1.20 “Intellectual Property Rights” means all intangible proprietary rights of
any kind or nature throughout the world, including without limitation the
following and all statutory and/or common law rights in, arising out of, or
associated therewith: (i) all Patent Rights; (ii) all works of authorship,
copyrights, mask works, copyright and mask work registrations and applications,
copyrightable subject matter whether or not registration for any such copyright
exists or is pending, and all other copyright interests accruing by reason of
international copyright conventions pertaining thereto (“Copyrights”); (iii) all
Know-How; (iv) all industrial designs and any registrations and applications
therefor; (v) all trade names, logos, trademarks and service marks, trademark
and service mark registrations and applications, and all other interests
accruing by reason of international trademark conventions and all goodwill
associated therewith (“Trademarks”); (vi) all databases and data collections
(including supplier or customer lists and supplier or customer databases);
(vii) all rights in Software; and (viii) rights to Uniform Resource Locators,
Web site addresses and domain names.

1.21 “Know-How” means all information, data, materials, technologies,
inventions, trade secrets, algorithms, concepts, system designs, engineering
models, ideas, software, discoveries, processes, standards, methods,
compositions, formulae, procedures, protocol techniques, results of
experimentation and testing, and other know-how, whether or not patentable or
copyrightable.

1.22 “Knowledge of Seller” or “Seller’s Knowledge” means the actual knowledge of
Mike Janssen, James Newman, and Jim Jones; provided, however, that such person
shall have made reasonable inquiry of those employees and consultants of Seller
who would reasonably be expected to have knowledge of the matter in question;
provided further, however, that if any such person shall not make such
reasonable inquiry, then such person shall be deemed to have actual knowledge of
those facts or matters that such person would reasonably be expected to have had
such person made such inquiry.

1.23 “Material Adverse Effect on Buyer” means a circumstance, state of facts,
event, consequence or result that materially and adversely affects, or could
reasonably be expected to affect materially and adversely, the financial
condition or operating results of Buyer, or the ability of Buyer to consummate
the transactions which it is required to consummate under this Agreement and the
ACI APA.

 

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1.24 “Material Adverse Effect on Seller” means a circumstance, state of facts,
event, consequence or result that materially and adversely affects, or could
reasonably be expected to affect materially and adversely, the Purchased Assets,
Seller’s financial condition, or Seller’s operating results, or the ability of
Seller to consummate the transactions which it is required to consummate under
this Agreement.

1.25 “Off the Shelf Software” means commercially available software licensed to
the Seller under generally available terms and conditions, other than software
included in or necessary to operate any Product.

1.26 “Patent Rights” means all (i) issued patents; (ii) pending patent
applications and rights to file applications, including without limitation, all
provisional applications, substitutions, continuations, continuations-in-part,
divisions, re-examinations, national phase PCT applications, PCT international
applications, and all foreign counterparts; (iii) patents-of-addition, reissues,
renewals, revivals, reexamination certificates, and extensions and restorations
by existing or future extension or restoration mechanisms, including, without
limitation, supplementary protection certificates and the equivalent thereof;
(iv) inventor’s certificates; and (v) forms of government-issued rights
substantially similar to any of the foregoing throughout the world.

1.27 “Permitted Encumbrances” means (i) any lien for taxes that are not yet due
or are being contested in good faith, (ii) any carrier’s, warehouseman’s,
mechanic’s, materialman’s, repairman’s, landlord’s, lessor’s or similar
statutory lien incidental to the ordinary conduct of the Business, or (iii) any
municipal and zoning ordinance, recorded easement, covenant or restriction that
does not prohibit or materially interfere with the present use, or materially
affect the present value, of the Business or the Purchased Assets.

1.28 “Person” means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity, as well as any syndicate or
group of any of the foregoing.

1.29 “Product” means any radio frequency nerve ablation product that uses or
incorporates any Transferred Intellectual Property Rights or ACI Transferred
Intellectual Property Rights.

1.30 “Required Consent” means consent by all of the members of Seller to
consummate this Agreement and the transactions contemplated herein.

1.31 “Software” means any and all computer software, in object code and source
code, and all underlying Intellectual Property Rights in connection therewith,
owned or transferable by Seller.

1.32 “Tax” or “Taxes” means any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and

 

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property taxes as well as public imposts, fees and social security charges
(including but not limited to health, unemployment and pension insurance),
together with all interest, penalties and additions imposed with respect to such
amounts and any obligation under any agreement or arrangement with any other
Person with respect to such amounts and including any liability for taxes of a
predecessor entity.

1.33 “Third Part(y/ies)” means any Person(s) other than Buyer, Seller or their
respective Affiliates.

1.34 “Transferred Books and Records” means Books and Records of Seller related
to the Business; provided, however, that Transferred Books and Records shall not
include Seller’s corporate minute book, general ledger, tax returns, Books and
Records relating to Seller’s physical facilities, directors, officers,
shareholders, optionholders, financial and other accounting records necessary
for the preparation of financial statements, tax returns or government-required
filings, personnel records and other records that Seller is required by law to
retain in its possession (provided that to the extent consistent with law copies
of such personnel records shall be provided to Buyer) and other Books and
Records primarily related to Seller as a corporate entity.

1.35 “Transferred Contracts” means the Confidentiality, Non-Solicitation, and
Invention Assignment Agreement between Seller and each of Michael Janssen, James
Jones, James Newman and Jeffrey Buske, as listed on Schedule 2.1.

1.36 “Transferred Intellectual Property Rights” means all Intellectual Property
Rights owned or transferable by Seller, including without limitation the
Transferred Patent Rights, all Intellectual Property Rights in and to the
inventions disclosed in the patent applications and draft applications listed or
described on Schedule 2.1, and other Intellectual Property Rights listed or
described on Schedule 2.1, but excluding the Excluded Assets.

1.37 “Transferred Patent Rights” means all Patent Rights owned or transferable
by Seller, including without limitation the patent applications and draft patent
applications listed on Schedule 2.1, including without limitation any Patent
Rights that claim priority to the applications identified on Schedule 2.1 and
all patents issuing therefrom.

2. Purchase and Sale of the Purchased Assets.

2.1 Purchased Assets. Subject to the terms and conditions of this Agreement,
Buyer hereby agrees to purchase from Seller, and Seller hereby agrees to sell,
convey, transfer and assign to Buyer, on the Closing Date (as defined in
Section 2.7), all of Seller’s right, title and interest in and to the following
assets, including without limitation all those assets described on Schedule 2.1
attached hereto, but excluding the Excluded Assets (collectively the “Purchased
Assets”):

(a) The Transferred Intellectual Property Rights;

(b) All rights of Seller under the Transferred Contracts existing as of or
arising after Closing;

 

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(c) The Existing JNJ-ACI License (which is being transferred to Buyer by way of
the termination of such agreement pursuant to the Termination Agreement and the
execution of this Agreement and of the ACI APA between ACI and Buyer);

(d) All tangible embodiments of the Transferred Intellectual Property Rights,
including without limitation all documentation, software programs, test devices,
prototypes, specifications, lab notebooks, and the like related to the
Transferred Intellectual Property Rights;

(e) Any rights under Contracts other than the Existing JNJ-ACI License
(including without limitation employment agreements, consulting agreements, and
employee assignment of inventions agreements) to the extent necessary to enforce
the Transferred Intellectual Property Rights;

(f) The Transferred Books and Records; and

(g) All rights to recover past, present and future damages for the breach,
infringement or misappropriation, as the case may be, of any of the foregoing.

2.2 Excluded Assets. Seller shall retain all assets of Seller that are not
Purchased Assets (collectively, the “Excluded Assets”), which retained assets
shall include, without limitation:

(a) All cash, cash equivalents and bank accounts owned by Seller on the Closing
Date;

(b) All Contracts other than the Transferred Contracts and the Existing JNJ-ACI
License;

(c) All rights of Seller under the Transferred Contracts existing as of or
arising on or prior to the Closing;

(d) All rights of Seller under the Existing JNJ-ACI License existing as of or
arising on or prior to the Closing;

(e) All of Seller’s insurance policies and rights of Seller thereunder;

(f) All rights of Seller under this Agreement and other agreements executed in
conjunction herewith; and

(g) All rights to recover past, present and future damages for the breach,
infringement or misappropriation, as the case may be, of any of the foregoing.

2.3 Retained Liabilities. Other than the obligations of Seller under the
Transferred Contracts that arise after the Closing, Buyer shall not be obligated
to assume or perform and is not assuming or performing any liabilities or
obligations of Seller, whether known or unknown, fixed or contingent, certain or
uncertain, and regardless of when such liabilities or obligations may arise or
may have arisen or when they are or were asserted, including without limitation
all liabilities arising from any agreement or arrangement (whether written or
oral) between or among Seller, ACI and/or AHI (the “Retained Liabilities”), and
Seller shall remain responsible for all Retained Liabilities.

 

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2.4 ACI APA. On even date herewith, Buyer and ACI will enter into the ACI APA,
which is attached as Exhibit A. Seller acknowledges that it has reviewed the ACI
APA and expressly consents that all consideration payable by Buyer under this
Agreement will be paid to ACI pursuant to the terms of the ACI APA, which
payment constitutes valuable consideration to Seller in compensation for the
Purchased Assets sold to Buyer under this Agreement.

2.5 Transfer Documents. On the Closing Date, (i) the sale of all tangible assets
included in the Purchased Assets by Seller to Buyer in accordance with this
Agreement will be further evidenced by a Bill of Sale in substantially the form
of Exhibit C hereto (the “Bill of Sale”); and (ii) the assignment of the
Transferred Intellectual Property Rights from Seller to Buyer in accordance with
this Agreement will be further evidenced by assignment documents relating to
Patent Rights in the form attached as Exhibit D hereto (the “Intellectual
Property Assignments”).

2.6 Consideration. The consideration for the sale to Buyer of the Purchased
Assets under this Agreement and the sale to Buyer of the ACI Purchased Assets
under the ACI APA shall consist of (i) [*] (the “JNJ Cash Consideration”, which
is payable pursuant to this Agreement) and the ACI Cash Consideration (as
defined in and payable under the ACI APA) (collectively, the “Cash
Consideration”); (ii) the assumption by Buyer of the Assumed Liabilities as
defined in the ACI APA; (iii) the Royalty Consideration (as defined in and
payable under the ACI APA); and (iv) the potential to earn a Success Milestone
(as defined in and payable under the ACI APA, and together with the Cash
Consideration and Royalty Consideration, the “Purchase Price”). For the
avoidance of doubt, Buyer will not be required to make any payments other than
the JNJ Cash Consideration to Seller in consideration for the sale to Buyer of
the Purchased Assets under this Agreement.

2.7 The Closing. The consummation of the transactions contemplated hereby (the
“Closing”) shall take place simultaneously with the execution of this Agreement
(the “Closing Date”) at the offices of Ropes & Gray LLP, 525 University Avenue,
Palo Alto, California, or at such other date and place as the Parties may agree
and shall be deemed to occur at 1:00 p.m., local time, on such date.

(a) Closing Deliveries of Seller. At the Closing, Seller shall deliver, or cause
to be delivered to Buyer, the documents and instruments set forth in
Section 5.5, in form and substance reasonably satisfactory to Buyer and its
counsel.

(b) Closing Deliveries of Buyer. At the Closing, Buyer shall deliver, or cause
to be delivered: (i) [*], which amount is equal to the JNJ Cash Consideration
plus [*] to cover Colorado sales tax, in cash payable by wire transfer to such
account as Seller may reasonably direct, or by such other method of payment as
Seller and Buyer may mutually agree; and (ii) the documents and instruments set
forth in Section 6.4, in form and substance reasonably satisfactory to Seller
and its counsel.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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2.8 Allocation of Purchase Price. The Purchase Price shall be allocated
consistent with the reasonable good faith determination of Buyer after
consultation with Seller and ACI within sixty (60) days following the Closing.
The Parties and ACI acknowledge that for financial reporting purposes, Buyer is
required to determine and allocate a purchase price for the acquisition of the
Purchased Assets and the ACI Purchased Assets in accordance with GAAP in the
United States, and that Buyer’s determinations under GAAP will differ from the
requirements of Section 1060 of the Internal Revenue Code and the regulations
promulgated thereunder. Buyer and Seller hereby agree that the amounts set forth
in the Bill of Sale (Exhibit C) represent the fair market value of all tangible
assets included in Purchased Assets. These fair market values will be used in
the allocation of the Purchase Price and in the determination of state or local
taxes due as of the Closing. After the Closing, Buyer and Seller shall make
consistent use of the allocation required under Section 1060 of the Internal
Revenue Code for all Tax purposes and in all filings, declarations and reports
with the Internal Revenue Service or any other applicable taxing authority in
respect thereof. In any and all actions, suits, proceedings, arbitration, or
governmental or regulatory investigations or audits related to the determination
of any Tax, neither Buyer nor Seller shall contend or represent that such
allocation is not a correct allocation.

2.9 Transfer Taxes. Buyer shall be responsible for the payment of, and shall pay
when due, any sales, use, excise or similar transfer taxes that may be payable
in connection with the sale and purchase of the Purchased Assets. Seller
acknowledges that Buyer shall purchase all inventory for resale.

3. Representations and Warranties of Seller. Seller hereby represents and
warrants to Buyer, subject to the exceptions specifically disclosed in the
attached schedule of exceptions (the “Disclosure Schedule”), as follows:

3.1 Authority and Binding Effect. Seller has the full company power and
authority to execute and deliver this Agreement and the Ancillary Agreements.
This Agreement and the Ancillary Agreements, and the consummation by Seller of
its obligations contained herein and therein, have been duly authorized by all
necessary company actions of Seller, and this Agreement and the Ancillary
Agreements have been duly executed and delivered by Seller. This Agreement and
the Ancillary Agreements are valid and binding agreements of Seller, enforceable
against Seller in accordance with their respective terms.

3.2 Organization and Standing. Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Colorado, and Seller is qualified to do business in the state of Colorado, which
is the only jurisdiction where such qualification is necessary and where the
failure of Seller to be so qualified would have a Material Adverse Effect on
Seller. Seller has the requisite company power and authority to own or lease the
Purchased Assets and to perform all of its obligations under the Existing
JNJ-ACI License. Seller has delivered to Buyer or its counsel a true and correct
copy of its organizational documents, each as amended to date and in full force
and effect on the date hereof.

3.3 The Purchased Assets. Seller has, and on the Closing Date will convey and
transfer to Buyer all its interest in the Purchased Assets, including but not
limited to good and valid title, free and clear of all Encumbrances of any
nature whatsoever, except for Permitted Encumbrances and Encumbrances arising by
the terms of the Existing ACI-JNJ License or the Transferred Contracts.

 

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3.4 Contracts. Except as set forth on Schedule 2.2, the Existing JNJ-ACI License
and the Transferred Contracts are the only executory Contracts between Seller
and any Person related to the Transferred Intellectual Property Rights. Except
as would not have a Material Adverse Effect on Seller, the Existing JNJ-ACI
License and the Transferred Contracts are in full force and effect immediately
prior to the Closing (after which time the Termination Agreement will take
effect with respect to the Existing JNJ-ACI License) and Seller is not in
breach, violation or default thereunder nor is any Person obligated to Seller
pursuant to the Existing JNJ-ACI License in breach, violation or default
thereunder. Seller has not received notice that Seller has breached, violated or
defaulted under, any of the terms or conditions of the Existing JNJ-ACI License
or the Transferred Contracts. Other than the Existing JNJ-ACI License or the
Transferred Contracts, there is no agreement (not to compete or otherwise),
commitment, judgment, injunction, order or decree to which Seller is a party
relating to the Purchased Assets or otherwise binding upon the Seller or the
Purchased Assets which has or may have the effect of prohibiting or impairing
the transactions contemplated by this Agreement, or affecting the validity, use
or enforceability of the Purchased Assets. Other than the Existing JNJ-ACI
License, Seller has not entered into any agreement which places any restrictions
upon Seller or ACI with respect to selling, licensing or otherwise distributing
any of the ACI Products, the Transferred Intellectual Property Rights, or the
ACI Transferred Intellectual Property Rights to, or providing services to,
customers or potential customers or any class of customers, in any geographic
area, during any period of time or in any segment of the market.

3.5 Intellectual Property

(a) Each item of Transferred Intellectual Property Rights is held by Seller free
and clear of any Encumbrances (including without limitation any distribution
rights and royalty rights), other than Permitted Encumbrances and Encumbrances
arising by the terms of the Existing JNJ-ACI License, the ACI APA, or the
Transferred Contracts. All Transferred Intellectual Property Rights will be
fully transferable, alienable or licensable by Buyer without restriction and
without payment of any kind to any Third Party.

(b) Schedule 2.1 accurately and completely identifies all Filed Intellectual
Property Rights that are owned or transferable by Seller. All Filed Intellectual
Property Rights included in the Transferred Intellectual Property Rights are
currently in compliance with formal legal requirements (including payment of
filing, examination and maintenance fees and proofs of use), and are not subject
to any unpaid maintenance fees or taxes or actions falling due within ninety
(90) days after the Closing Date. There are no proceedings or actions before any
court, tribunal, administrative agency, or commission (including the United
States Patent and Trademark Office or equivalent authority anywhere in the
world) related to any such Filed Intellectual Property Rights included in the
Transferred Intellectual Property Rights. Seller has claimed small business
status with respect to the Transferred Patent Rights.

(c) To the extent that any Transferred Intellectual Property Rights were
originally owned or created by or for any Third Party, but excluding any Off the
Shelf Software, (i) the Seller has a written agreement with such Third Party or
Third Parties with

 

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respect thereto, pursuant to which the Seller has obtained complete,
unencumbered and unrestricted ownership (except for Permitted Encumbrances and
Encumbrances arising by the terms of the Existing JNJ-ACI License or the
Transferred Contracts) and is the exclusive owner of, all such Transferred
Intellectual Property Rights by valid assignment or otherwise; (ii) the transfer
of the Transferred Intellectual Property Rights from Seller to Buyer hereunder
does not violate such Third Party agreements; (iii) except as may be provided in
the Existing JNJ-ACI License or the Transferred Contracts, such Third Parties
have not retained and do not have any rights or licenses with respect to the
Transferred Intellectual Property Rights; and (iv) to the Knowledge of Seller,
no valid basis exists for such Third Party to challenge or object to this
Agreement.

(d) Except pursuant to the Existing JNJ-ACI License or the Transferred
Contracts, as will be transferred to Buyer pursuant to the terms of this
Agreement, Seller has not transferred ownership of, or granted any license of or
right to use, or authorized the retention of any rights to use, to any Third
Party, (i) any Transferred Intellectual Property Rights or (ii) any ACI
Transferred Intellectual Property Rights.

(e) No government funding, facilities of a university, college, other
educational institution or research center or funding from Third Parties was
used by Seller in the development of the Transferred Intellectual Property
Rights owned by Seller. To the Knowledge of Seller, no current or former
employee, consultant or independent contractor of Seller, who was involved in,
or who contributed to, the creation or development of any Transferred
Intellectual Property Rights has performed services for the government, a
university, college, or other educational institution, or a research center,
during a period of time during which such employee, consultant or independent
contractor was also performing services for Seller.

(f) Other than the Existing JNJ-ACI License, the Transferred Contracts, and the
proprietary rights agreements described in Section 3.5(j) below, there are no
Contracts, whether written or oral, express or implied, to which Seller is a
party with respect to any Transferred Intellectual Property Rights.

(g) To the Knowledge of Seller, Seller has not received notice from any Person
claiming that the Business, the Purchased Assets, or the ACI Purchased Assets
infringe or misappropriate the Intellectual Property Rights of any Person (nor
does Seller have Knowledge of any valid basis therefor). To Seller’s Knowledge,
no Person is infringing or misappropriating the Transferred Intellectual
Property Rights.

(h) There are no contracts, licenses or agreements between Seller and any other
Person with respect to the Transferred Intellectual Property Rights or with
respect to the ACI Transferred Intellectual Property Rights, under which there
is any dispute or, to Seller’s Knowledge, any threatened dispute regarding the
scope of such agreement or performance under such agreement.

(i) Seller has taken all commercially reasonable steps that are required to
protect Seller’s rights in confidential information and trade secrets of Seller
associated with or related to the Transferred Intellectual Property Rights and
the ACI Transferred Intellectual Property Rights.

 

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(j) All current and former employees or Third Parties who have created or
modified any of the Transferred Intellectual Property Rights that are material
to the operation of the Business have executed a proprietary rights agreement
substantially in the form(s) set forth in Section 3.5(j) of the Disclosure
Schedule.

(k) Seller is not required to make or accrue any royalty payment to any Third
Party in connection with any of the Purchased Assets.

3.6 Conflicts; Consents. The execution and delivery by Seller of this Agreement
and the Ancillary Agreements, and the consummation of the transactions
contemplated hereby and thereby, will not conflict with or result in any
violation of, or default under, or give rise to a right of termination,
cancellation, modification or acceleration of any obligation or loss of any
benefit under (any such event, a “Conflict”) (i) any provision of the
organizational documents of Seller, each as amended to date; (ii) Contracts to
which Seller or any of its properties or assets (including intangible assets) is
subject; or (iii) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Seller or any of its properties or assets (tangible and
intangible), except in any such case where it would not have a Material Adverse
Effect on Seller. Subject to the Required Consent, it is not necessary for
Seller to take any action or to obtain any approval, consent or release by or
from any Third Party, governmental or other, to enable Seller to enter into or
perform its obligations under this Agreement and the Ancillary Agreements.

3.7 Compliance with Law/Permits. Except as may be required by any applicable
bulk sales laws, the Seller is in compliance with all, and is not in violation
of any, law, ordinance, order, decree, rule or regulation of any governmental
agency or authority, the violation of or noncompliance with which could have a
Material Adverse Effect on Seller. No unresolved (i) charges of violations of
laws or regulations relating to Seller’s business have been made or threatened;
(ii) proceedings or investigations relating to Seller’s business are pending or,
to Seller’s Knowledge, have been threatened; and (iii) citations or notices of
deficiency have been issued or have been threatened, against Seller relating to
or arising out of its business by any governmental authorities, which have had
or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Seller; and, to Seller’s Knowledge, there are no
facts or circumstances upon which any such charges, proceedings, investigations,
citations, or deficiency notices reasonably may validly be instituted, issued or
brought hereafter.

3.8 Litigation and Proceedings. There is no claim, action, suit, proceeding or
investigation (or any counter or cross-claim in an action brought by or on
behalf of Seller), whether at law or in equity, or before or by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind, that is pending or, to Seller’s
Knowledge, threatened, against Seller, which (i) could reasonably be expected to
adversely affect Seller’s ability to perform its obligations under this
Agreement or complete any of the transactions contemplated hereby; or
(ii) involves the possibility of any judgment or liability, or which may become
a claim, against Buyer, its business or the Purchased Assets. Seller is not
subject to any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over Seller or any of the Purchased Assets
or ACI Purchased Assets or the Business that affects, involves or relates to the
Purchased Assets or the ACI Purchased Assets.

 

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3.9 Tax Matters. To the extent failure to do so would adversely impact Buyer,
the Purchased Assets or the ACI Purchased Assets, Buyer’s use of the Purchased
Assets or ACI Purchased Assets or operation of the Business, (a) as of the
Closing Date, Seller will have paid all Taxes it is required to pay and will
have withheld with respect to its employees all federal, state and foreign
income taxes and social security charges and similar fees under the Federal
Insurance Contribution Act, Federal Unemployment Tax Act and other Taxes
required to be withheld; and (b) Seller has not been delinquent in the payment
of any Tax, nor is there any Tax deficiency outstanding, assessed or proposed
against Seller, nor has Seller executed any waiver of any statute of limitations
on or extending the period for the assessment or collection of any Tax. To the
extent relevant to the Purchased Assets or the Business, (i) as of the Closing
Date, Seller will have prepared and timely filed all required federal, state,
local and foreign returns, estimates, information statements and reports
(“Returns”) relating to any and all Taxes concerning or attributable to Seller
or its operations and required to have been filed on or before the Closing Date
(taking into account extensions to file) and such Returns are or will be true
and correct and have been or will be completed in accordance with applicable
law; and (ii) no audit or other examination of any Return of Seller is presently
in progress, nor has Seller been notified of any request for such an audit or
other examination. Seller does not have, and to Seller’s Knowledge, there is no
basis for, the assertion of any claim for any liabilities for unpaid Taxes for
which Buyer would become liable as a result of the transactions contemplated by
this Agreement. There are (and immediately following the Closing there will be)
no Encumbrances on the Purchased Assets relating to or attributable to Taxes,
other than Permitted Encumbrances. To Seller’s Knowledge, there is no basis for
the assertion of any claim relating or attributable to Taxes which, if adversely
determined, would result in any Encumbrance, other than Permitted Encumbrances,
on the Purchased Assets.

3.10 No Broker. Seller has not retained or used the services of an agent, finder
or broker in connection with the transactions contemplated by this Agreement.

4. Representations and Warranties of Buyer. Buyer represents and warrants to
Seller as follows:

4.1 Authority and Binding Effect. Buyer has the full corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements.
This Agreement and the Ancillary Agreements, and the consummation by Buyer of
its obligations contained herein and therein, have been duly authorized by all
necessary corporate actions of Buyer, and this Agreement and the Ancillary
Agreements have been duly executed and delivered by Buyer. This Agreement and
the Ancillary Agreements are valid and binding agreements of Buyer, enforceable
against Buyer in accordance with their respective terms.

4.2 Organization and Standing. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and Buyer
is qualified to do business in each jurisdiction where such qualification is
necessary and where the failure to be so qualified would have a Material Adverse
Effect on Buyer. Buyer has the requisite corporate power and authority to
conduct its business as now conducted, to own or lease the Purchased Assets, and
to use such Purchased Assets in the conduct of its business.

 

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4.3 Conflicts; Consents. The execution and delivery by Buyer of this Agreement
and the Ancillary Agreements, and the consummation of the transactions
contemplated hereby, will not give rise to a Conflict with respect to (i) any
provision of the certificate of incorporation or bylaws of Buyer, each as
amended to date; (ii) Contracts to which Buyer or any of its properties or
assets (including intangible assets) is subject; or (iii) any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Buyer or any
of its properties or assets (tangible and intangible), except in any such case
where it would not have a Material Adverse Effect on Buyer. It is not necessary
for Buyer to take any action or to obtain any approval, consent or release by or
from any Third Party, governmental or other, to enable Buyer to enter into or
perform its obligations under this Agreement and the Ancillary Agreements.

4.4 Compliance with Law/Permits. Buyer is in compliance with all, and is not in
violation of any, law, ordinance, order, decree, rule or regulation of any
governmental agency or authority, the violation of or noncompliance with which
could have a Material Adverse Effect on Buyer. No unresolved (i) charges of
violations of laws or regulations relating to Buyer’s business have been made or
threatened; (ii) proceedings or investigations relating to its business are
pending or, to Buyer’s knowledge, have been threatened; and (iii) citations or
notices of deficiency have been issued or have been threatened, against Buyer
relating to or arising out of its business by any governmental authorities,
which have had or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Buyer.

4.5 Litigation and Proceedings. There is no action, suit, proceeding or
investigation (or any counter or cross-claim in an action brought by or on
behalf of Buyer), whether at law or in equity, or before or by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind, that is pending or, to Buyer’s
knowledge, threatened, against Buyer, which (i) could reasonably be expected to
affect adversely Buyer’s ability to perform its obligations under this Agreement
or complete any of the transactions contemplated hereby; or (ii) to Buyer’s
knowledge, involves the possibility of any judgment or liability, or which may
become a claim, against Seller, its business or the Excluded Assets. Buyer is
not subject to any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental department, commission, board, bureau, agency
or instrumentality having jurisdiction over Buyer, any of the Purchased Assets
or the ACI Purchased Assets that affects, involves or relates to the Purchased
Assets or the ACI Purchased Assets.

4.6 No Broker. Buyer has not retained or used the services of an agent, finder
or broker in connection with the transactions contemplated by this Agreement.

5. Conditions Precedent to the Obligations of Buyer. The obligation of Buyer to
consummate the purchase of the Purchased Assets from Seller is subject to the
fulfillment, or the waiver by Buyer, at or prior to the Closing, of each of the
following conditions precedent:

5.1 ACI APA. Buyer and ACI shall have executed the ACI APA.

5.2 Representations and Warranties. The representations and warranties made by
Seller in this Agreement (a) that are not qualified by materiality or Material
Adverse Effect on Seller will be true and correct, in all material respects, at
and as of the Closing Date, and (b) that are qualified by materiality or
Material Adverse Effect on Seller will be true and correct in all respects at
and as of the Closing Date (in each case, except for any such representations
and warranties that are made as of a particular date, which will be true and
correct in all material respects as of such particular date).

 

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5.3 Certificates. Buyer shall have received from Seller one or more certificates
executed by an authorized officer or member of Seller, dated as of the Closing
Date and reasonably satisfactory in form and substance to Buyer, certifying that
(i) the condition set forth at Section 5.2 above has been met; (ii) Seller has
performed and complied, in all material respects, with all of Seller’s covenants
required to have been performed or complied with by Seller pursuant hereto on or
prior to the Closing Date and (iii) attached to such certificate(s) are true and
correct copies of Seller’s organizational documents, governing agreements and
resolutions of the members of Seller approving the execution and delivery of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby.

5.4 Termination of Existing JNJ-ACI License. ACI and Seller shall have executed
the Termination Agreement between Seller and ACI, which is attached as Exhibit E
hereto (the “Termination Agreement”).

5.5 Delivery of Additional Documents. On the Closing Date, Seller shall deliver,
or cause to be delivered, to Buyer the following documents and instruments, in
form and substance satisfactory to Buyer and its counsel, unless waived in
writing by Buyer:

(a) Bill of Sale. The Bill of Sale, duly executed by the Seller;

(b) Intellectual Property Assignments. The Intellectual Property Assignments,
duly executed by the Seller;

(c) Assignment and Assumption Agreement. The Assignment and Assumption
Agreement, duly executed by the Seller;

(d) Evidence of Consent. Evidence of the receipt of the Required Consent by
Seller;

(e) Good Standing Certificates. Good standing certificate of Seller, dated as of
a date that is not more than five (5) days prior to the Closing Date, from the
Secretary of State of Colorado;

(f) Intellectual Property Documents. Evidence of Seller’s authorization to its
intellectual property counsel to deliver files relating to the Transferred
Intellectual Property Rights to Buyer’s counsel; and

(g) Other Documents. Such other documents and instruments as Buyer or Buyer’s
counsel may reasonably request so as better to evidence or effectuate the
transactions contemplated hereby.

 

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6. Conditions Precedent to Obligations of Seller. The obligation of Seller to
consummate the sale of the Purchased Assets to Buyer is subject to the
fulfillment, or the waiver by Seller, at or prior to the Closing, of each of the
following conditions precedent:

6.1 ACI APA. Buyer and ACI shall have executed the ACI APA.

6.2 Representations and Warranties. The representations and warranties made by
Buyer in this Agreement (a) that are not qualified by materiality or Material
Adverse Effect on Buyer will be true and correct, in all material respects, at
and as of the Closing Date, and (b) that are qualified by materiality or
Material Adverse Effect on Buyer will be true and correct in all respects at and
as of the Closing Date (in each case, except for any such representations and
warranties that are made as of a particular date, which will be true and correct
in all material respects as of such particular date).

6.3 Certificates. Seller shall have received from Buyer a certificate executed
by an authorized officer of Buyer, dated as of the Closing Date and reasonably
satisfactory in form and substance to Seller, certifying that (i) the condition
set forth at Section 6.2 above has been met; (ii) Buyer has performed and
complied, in all material respects, with all of Buyer’s covenants required to
have been performed or complied with by Buyer pursuant hereto on or prior to the
Closing Date; and (iii) attached to such certificate are true and correct copies
of Buyer’s certificate of incorporation, by-laws, and resolutions of the Board
of Directors of Buyer approving the execution and delivery of this Agreement and
the Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby.

6.4 Delivery of Additional Documents. On the Closing Date, Buyer shall deliver,
or cause to be delivered, to Seller the following documents and instruments, in
form and substance satisfactory to Seller and its counsel, unless waived in
writing by Seller:

(a) Bill of Sale. The Bill of Sale, duly acknowledged by the Seller;

(b) Good Standing Certificates. A good standing certificate of Buyer, dated as
of a date that is not more than five (5) days prior to the Closing Date, from
the Secretaries of States of Delaware and California; and

(c) Other Documents. Such other documents and instruments as Seller or Seller’s
counsel may reasonably request so as better to evidence or effectuate the
transactions contemplated hereby.

7. Post-Closing Covenants.

7.1 Commercially Reasonable Efforts.

(a) Buyer will use commercially reasonable efforts, consistent with its efforts
in respect of other products which it owns or to which it has rights, to develop
and commercialize Products for the treatment of glabellar furrows during the
Royalty Period (as defined in the ACI APA); provided that Buyer will not be
required to use any level of efforts to sell, market, or distribute Products in
any jurisdiction prior to receipt of all regulatory approvals reasonably deemed
by Buyer to be necessary for the marketing and sale of Products in such
jurisdiction.

 

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(b) Buyer will spend a cumulative minimum of approximately [*] in operating
expenses related to the Products and the Transferred Intellectual Property
Rights in the first two (2) years following the receipt of regulatory approval
for the treatment of glabellar furrows, which investment may be in the form of
research and development, acquisition of technology enhancements, clinical
studies, obtaining regulatory approval, clinical education, sales and marketing
efforts, and/or the assumption of certain employees of ACI and associated
operating expenses. The Parties agree that such investment will satisfy Buyer’s
obligations under this Section 7.1 during that two year period; provided that
Buyer may reasonably adjust such investment amount as a result of material
unforeseen events, including but not limited to, unfavorable developments
related to regulatory approvals or Intellectual Property Rights.

(c) Whether certain efforts by Buyer are deemed to be “commercially reasonable”
under this Section 7.1 with respect to Products for the treatment of glabellar
furrows will be determined in light of all relevant factors in the relevant
jurisdictions including (1) the market potential and rate of market growth of
Products (including anticipated profit margin and the perceived market size);
(2) the expense and difficulty of obtaining regulatory approval for Products in
each jurisdiction (including the extent of the indications, if any, for which
Products have been approved); (3) in Buyer’s reasonable estimation, whether or
not the sale of Products infringes or could infringe the Intellectual Property
Rights of Third Parties; and (4) the competitive position of Products vis-à-vis
other products marketed and sold for the same indications, including with
respect to the safety, efficacy, and cost of Products when compared to such
other products. Buyer’s reasonable commercial efforts may include, but are not
limited to, one or more of the following: developing and using a variety of
sales tools, promotions, and in-office marketing materials; organizing and
sponsoring clinical education programs; promoting Products through key opinion
leader programs and customer outreach programs; promoting Products at major
medical trade shows attended by plastic surgeons, facial plastic surgeons, ENT
surgeons, occuloplastic surgeons, and dermatologists; training, educating,
supporting, and maintaining representatives to market and sell Products for the
treatment of glabellar furrows; and applying reasonable financial, personnel,
and facilities resources in support of its Commercialization efforts. For
purposes of determining whether or not Buyer is complying with its obligations
under this Section 7.1, Buyer’s sales and marketing efforts for Products in all
relevant jurisdictions will be considered in the aggregate, and not by separate
jurisdiction.

(d) Seller acknowledges and agrees that nothing in this Agreement (including,
without limitation, any schedules or attachments hereto) will be construed as
representing an estimate or projection of either (i) the extent to which
Products will be successfully commercialized by Buyer or (ii) the anticipated
sales or the actual value of any Product. BUYER MAKES NO REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, THAT IT WILL BE ABLE TO SUCCESSFULLY
COMMERCIALIZE ANY PRODUCT OR, IF COMMERCIALIZED, THAT IT WILL ACHIEVE ANY
PARTICULAR SALES LEVEL OF SUCH PRODUCT(S).

7.2 Patent Prosecution. Buyer will use good faith efforts to prosecute and
maintain the Transferred Patent Rights such that the Transferred Patent Rights
cover the Products sold by Buyer.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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7.3 Agreement with AHI. Buyer will negotiate in good faith with AHI to enter
into an agreement as outlined in the letter of intent sent by Buyer to AHI dated
as of the date of this Agreement, a copy of which has been provided to Seller.
Seller will not take any actions that impede or interfere with the negotiations
between Buyer and AHI. In the event that Buyer and AHI execute an agreement as
described in this Section 7.3 and Buyer is obligated to pay royalties to AHI on
Products sold in the AHI Field, then (i) Buyer will use reasonable efforts to
determine whether the sale of a Product was in the Royalty Field or the AHI
Field; (ii) Buyer will not be in breach of this Agreement or the ACI APA as a
result of failure to pay a royalty payment with respect to a sale of a Product
if Buyer has paid either AHI or ACI in good faith a royalty on such sale; and
(iii) in the event of a dispute as to whether a Product sold by Buyer was sold
in the AHI Field or the Royalty Field (each as defined in the ACI APA), the
Parties will submit the matter to dispute resolution proceedings in accordance
with Section 9.11.

7.4 Records Retention; Access and Investigation. After the Closing Date, Buyer
shall retain the Transferred Books and Records for a period consistent with its
current record-retention policies and practices, but in no event less than seven
(7) years. Buyer shall provide Seller and its representatives reasonable access
to such Books and Records during normal business hours and upon reasonable
notice, to enable Seller to (i) prepare financial statements or Tax returns or
to act with respect to Tax audits, (ii) prosecute or defend Third Party claims
or litigation, and (iii) take any other action reason reasonably related to this
Agreement.

7.5 Further Assurances. Seller shall provide all cooperation reasonably
requested by Buyer in connection with any effort by Buyer to establish, perfect,
defend, or enforce its rights in or to the Purchased Assets and the ACI
Purchased Assets, including executing further consistent assignments, transfers,
licenses, and releases. To the extent Seller cannot transfer and assign any of
the Transferred Intellectual Property Rights, or any portion thereof, as of the
Closing, then Seller will assign and transfer such Transferred Intellectual
Property Rights at the first opportunity to do so. To the extent further
transfer or assignment of any Transferred Intellectual Property Rights is
required and Seller has not, within fifteen (15) Business Days of the delivery
of such assignment to Seller, (i) executed and returned to Buyer the form of
assignment reasonably requested by Buyer or (ii) delivered to Buyer a written
objection to Buyer’s request, then Seller hereby irrevocably appoints Buyer as
its attorney-in-fact with the right, authority, and ability to execute and enter
into such assignment on behalf of Seller. Seller stipulates and agrees that such
appointment is a right coupled with an interest and will survive the incapacity
or unavailability of Seller at any future time. To the extent that any of the
Transferred Intellectual Property Rights cannot be assigned and transferred by
Seller, then Seller hereby grants Buyer an irrevocable, worldwide, fully-paid
up, royalty-free, exclusive license, with the right to sublicense through
multiple tiers, to make, use, sell, improve, reproduce, distribute, perform,
display, transmit, manipulate in any manner, create derivative works based upon,
and otherwise utilize in any manner the Transferred Intellectual Property
Rights. In addition, Seller hereby releases, discharges, and covenants not to
assert against Buyer or Buyer’s Affiliates, licensees, or representatives, all
claims, causes, and rights of action, whether now existing or hereinafter
arising, and whether known or unknown, arising from any use or exploitation of
the Transferred Intellectual Property Rights; provided, however, that Seller
does not release or covenant not to assert any claim, cause, or right of action
based upon the breach of this Agreement or the ACI APA by Buyer.

 

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7.6 Expenses. Except as otherwise provided herein, each Party shall pay all of
its respective costs and expenses incurred or to be incurred by it in
negotiating and preparing this Agreement and in carrying out and closing the
transactions contemplated by this Agreement, whether or not this Agreement or
the transactions contemplated hereby are ever consummated.

7.7 Transition Support. Seller will provide commercially reasonable transition
support to Buyer as follows, in each case at the expense of Buyer:

(a) Access to Information. From the Closing Date until forty-five (45) days
following the Closing Date, upon reasonable notice received from Buyer and
during normal business hours, Seller shall afford Buyer and its representatives
free and full access to Seller’s personnel, properties, Contracts, and other
documents and data (such rights of access to be exercised in a manner that does
not unreasonably interfere with the operations of Seller), and otherwise
cooperate and assist Buyer, to the extent reasonably necessary (i) to confirm
that all Purchased Assets have been transferred to Buyer and (ii) for Buyer to
use the Purchased Assets after the Closing, and (iii) for Buyer to carry out its
covenants under this Agreement and the ACI APA. Any information of Seller’s so
reviewed by Buyer that does not constitute Purchased Assets shall be kept
strictly confidential by Buyer.

(b) Retained Liabilities. Seller will satisfy the Retained Liabilities in full
as such liabilities become due and payable pursuant to their terms.

(c) Inquiries. Seller agrees, for a period of one hundred eighty (180) days
following the Closing Date, to use good faith efforts to redirect to Buyer all
inquiries concerning the Purchased Assets made by any Person to Seller or any of
its agents or representatives.

7.8 Delivery or Destruction of Copies. Promptly after transfer of the Purchased
Assets to Buyer, and in no event later than sixty (60) days following the
Closing Date, Seller will determine whether any Purchased Assets or copies of
Purchased Assets remain in Seller’s or its employees’ or agents’ possession
(including without limitation information stored on computer hardware)
(collectively, the “Remaining Assets”). Seller will deliver to Buyer or destroy
all Remaining Assets and will provide to Buyer a certificate signed by a duly
authorized officer of Seller certifying such delivery or destruction; provided,
however, that Seller may destroy, rather than deliver, only those Remaining
Assets that are exact copies of the Purchased Assets delivered to Buyer.

7.9 Non-Competition. As of the Closing Date and for a period of five (5) years
thereafter, Seller covenants that Seller will not, either by itself or with,
through or for the benefit of any Affiliate, licensee, or Third Party, make,
use, sell, offer to sell, import, export, or otherwise develop or commercialize
any nerve ablation devices; provided, however, that if Buyer enters into a
license agreement with AHI as contemplated in the letter of intent dated as of
the date of this Agreement sent by Buyer to AHI, then Seller may engage in such
activities, but only through or for the benefit of AHI, or its wholly-owned
subsidiaries or licensees and solely in the AHI Field. The Parties acknowledge
that the restriction contained in this Section 7.9 is reasonable, valid, and
necessary for the adequate protection of Buyer’s business and that Buyer would
not have entered into this Agreement without the protection afforded it by this
Section 7.9.

 

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8. Indemnification; Survival.

8.1 Indemnification of Buyer. Subject to the provisions of this Section 8,
Seller shall indemnify and hold harmless Buyer, its stockholders, and its
representatives (collectively, the “Buyer Indemnitees”), from and against any
and all damage, loss, liability and expense (including without limitation
reasonable expenses of investigation and reasonable attorneys’ and consultants’
fees and expenses in connection with any action, suit or proceeding or
settlement of any of the foregoing) (collectively, “Losses”) incurred or
suffered by a Buyer Indemnitee arising out of:

(a) any breach of the representations and warranties of Seller set forth in this
Agreement;

(b) any breach of any covenant or agreement of Seller set forth in this
Agreement or in any certificate, instrument, or other document delivered
pursuant to this Agreement;

(c) any failure to comply with laws relating to bulk transfers or bulk sales
with respect to the transactions contemplated by this Agreement;

(d) claims by Seller’s or AHI’s stockholders or members or Seller’s or AHI’s
current or former employees that are related to this Agreement, the ACI APA, or
the transactions contemplated herein and therein; and

(e) the Retained Liabilities.

Notwithstanding any other provision of this Agreement, the remedies provided for
in this Section 8 shall constitute the sole and exclusive remedy of Buyer and
any other Buyer Indemnitee for any post-Closing claims made in connection with
this Agreement or any other Losses as described in this Section 8.1, except for
the actual fraud of Seller.

8.2 Indemnification of Seller. Subject to the provisions of this Section 8,
Buyer shall indemnify and hold harmless Seller, its members, and its
representatives (collectively, the “Seller Indemnitees”), from and against any
and all Losses incurred or suffered by a Seller Indemnitee arising out of:

(a) any breach of the representations and warranties of Buyer set forth in this
Agreement;

(b) any breach of any covenant or agreement of Buyer set forth in this Agreement
or in any certificate, instrument, or other document delivered pursuant to this
Agreement; and

(c) the ownership or use of the Purchased Assets after the Closing.

Notwithstanding any other provision of this Agreement, the remedies provided for
in this Section 8 shall constitute the sole and exclusive remedy of Seller and
any other Seller Indemnitee for any post-Closing claims made in connection with
this Agreement or any other Losses as described in this Section 8.2, except for
the actual fraud of Buyer.

 

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8.3 Limitations on Indemnification.

(a) Notwithstanding anything in Section 8.1 to the contrary, Seller shall not be
obligated to indemnify Buyer or any other Buyer Indemnitee until aggregate
Losses of Buyer and such Buyer Indemnitees under Section 8.1 have exceeded the
Basket Amount, in which case Buyer and the other Buyer Indemnitees shall be
entitled to indemnification for the total amounts of such Losses.
Notwithstanding the immediately preceding sentence, Buyer and Buyer’s
Indemnitees shall be entitled to recover for, and the Basket Amount shall not
apply as a threshold to, (i) any Losses arising or resulting from fraud or
fraudulent misrepresentation with respect to representations and warranties of
Seller contained in this Agreement; or (ii) any liabilities for indemnification
under Section 8.1(c), 8.1(d), or 8.1(e).

(b) Notwithstanding anything in Section 8.2 to the contrary, Buyer shall not be
obligated to indemnify Seller or any other Seller Indemnitee until aggregate
Losses of Seller and such Seller Indemnitees under Section 8.2 have exceeded the
Basket Amount, in which case Seller and the other Seller Indemnitees shall be
entitled to indemnification for the total amounts of such Losses.
Notwithstanding the immediately preceding sentence, Seller and Seller’s
Indemnitees shall be entitled to recover for, and the Basket Amount shall not
apply as a threshold to, (i) any Losses arising or resulting from fraud or
fraudulent misrepresentation with respect to representations and warranties of
Buyer contained in this Agreement; (ii) Buyer’s obligations to pay the Purchase
Price under the ACI APA (including any portion thereof to be paid after the
Closing, such as the Royalty Consideration or Success Milestone); (iii) any
liabilities for indemnification under Section 8.2(c); or (iv) any liability of
Buyer under Section 2.9 (Transfer Taxes).

(c) The maximum liability of Seller for any Losses in the aggregate under
Section 8.1(a) shall not exceed eight million dollars ($8,000,000) except that
there shall be no such limitation on Losses exceeding such amount that arise as
a result of (i) a breach of the representations and warranties in Section 3.1
(Authority and Binding Effect), 3.2 (Organization and Standing) or 3.6(i) or
3.6(iii) (Conflicts; Consents); (ii) intentional, knowing or willful breach of
this Agreement, fraud, or similar circumstances; or (iii) (for the avoidance of
doubt) indemnification under Sections 8.1(b), 8.1(c), 8.1(d), or 8.1(e).

(d) No claim for indemnification shall be made pursuant to Section 8.1(a) after
one (1) year from the Closing Date; provided, however, that claims for
indemnification under Section 8.1(a) may be made for up to three (3) years from
the Closing Date for Losses that arise as a result of a breach of the
representations and warranties in Section 3.4 (Contracts) and Section 3.5
(Intellectual Property). Notwithstanding the foregoing, any such claim for
indemnification shall continue as to any matter as to which a claim is submitted
in writing to Seller prior to such one or three-year period and identified as a
claim for indemnification pursuant to this Agreement, until such time as such
claims and matters are resolved. In addition, any such claim for indemnification
may be brought at any time to the extent it is based upon or involves (i) fraud
by the Indemnifying Party; or (ii) claims made under Section 8.1(a) for a breach
of Section 3.1 (Authority and Binding Effect), 3.2 (Organization and Standing)
or 3.6(i) or 3.6 (iii) (Conflicts; Consents).

 

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(e) Subject to the limitations set forth at this Section 8.3, Buyer may offset
against the Royalty Consideration and Success Milestone, as and when the Royalty
Consideration and/or Success Milestone becomes due and payable to ACI, any
amounts owed to Buyer for indemnification under Section 8.1.

(f) Amounts available pursuant to the Escrow Agreement and the royalty offset
described in Section 8.3(e) shall be Buyer’s only recourse for any liability of
Seller under Section 8.1(a), except in the case of (i) intentional, knowing or
willful breach of any representation, warranty, or covenant in this Agreement;
(ii) fraud or similar circumstances; or (iii) claims made under Section 8.1(a)
for a breach of Section 3.1 (Authority and Binding Effect), 3.2 (Organization
and Standing) or 3.6(i) or 3.6 (iii) (Conflicts; Consents).

(g) Subject to the limitations set forth at Section 9.3 of the ACI APA, Buyer
may also offset against the Royalty Consideration and Success Milestone, as and
when the Royalty Consideration and/or Success Milestone becomes due and payable,
any amounts owed to Buyer by ACI for indemnification under Section 9.1 of the
ACI APA. Amounts available pursuant to the Escrow Agreement will also be
available to satisfy any liability of ACI to Buyer under Section 9.1 of the ACI
APA.

8.4 Procedure. A Party seeking indemnification (the “Indemnitee”) will promptly
notify the other Party (the “Indemnifying Party”) in writing of a claim or suit;
provided that an Indemnitee’s failure to give such notice or delay in giving
such notice will not affect such Indemnitee’s right to indemnification under
this Section 8 except to the extent that the Indemnifying Party has been
prejudiced by such failure or delay. The Indemnitee has the right to participate
(a) at its own expense in the claim or suit with counsel of its own choosing and
(b) in selecting counsel to be used by the Indemnifying Party in such claim or
suit. The Indemnifying Party will consult with the Indemnitee in good faith with
respect to all non-privileged aspects of the defense strategy. The Indemnitee
will cooperate with the Indemnifying Party as reasonably requested, at the
Indemnifying Party’s sole cost and expense. The Indemnifying Party will not
settle any claim or suit without the Indemnitee’s prior written consent unless
such settlement is limited to the payment of cash by the Indemnifying Party and
contains a full release of the Indemnitee.

9. Miscellaneous.

9.1 Public Announcements. Neither Party shall make any public announcements
concerning matters concerning this Agreement or the ACI APA or the negotiation
thereof without the prior written consent of the other Party unless such
disclosure is required by law, in which case the announcing Party shall provide
the other Party with reasonable notice of such disclosure.

9.2 Assignment. This Agreement and the rights and obligations hereunder may only
be assigned by a Party upon the written consent of the other Party, and the
obligations of such transferring Party will then transfer to the acquiring party
upon any such assignment; provided, however, Seller may assign this Agreement
and the rights and obligations hereunder without the consent of Buyer to a
liquidating trust established by Seller or its members; and provided, further,
that a change of control, merger, and/or purchase of substantially all of the
assets of either Party (or, in the case of Buyer, substantially all of the
assets relating to the Product) shall not constitute

 

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an assignment requiring consent of the other Party. This Agreement will be
binding upon the successors and permitted assigns of the Parties and the name of
a Party appearing herein will be deemed to include the names of such Party’s
successors and permitted assigns to the extent necessary to carry out the intent
of this Agreement.

9.3 Confidentiality. Each Party hereby agrees, and agrees to cause its
stockholders, members, and representatives, to keep the terms of this Agreement,
the ACI APA, and each of the Ancillary Agreements confidential and will treat
and safeguard such terms with the same degree of care with which it treats its
own confidential information and to limit access to such terms to such
employees, consultants, representatives and professional advisors of such Party
who reasonably require such access in connection with the activities
contemplated by this Agreement or otherwise to administer the terms of this
Agreement. To the extent practicable, in the event that a Party is required to
disclose such terms pursuant to any law, regulation, or judicial or
administrative directive, such Party will promptly notify the other Party in
order to allow the other Party a reasonable period of time to obtain protective
or confidential treatment of such terms before they are disclosed. Either Party
may disclose the terms of this Agreement and the Ancillary Agreements (i) to the
extent required, in the reasonable opinion of such Party’s legal counsel, to
comply with applicable laws, including, without limitation, the rules and
regulations promulgated by the United States Securities and Exchange Commission;
and (ii) in connection with a prospective acquisition, merger, financing, or
license for such Party, to prospective acquirers or merger candidates or to
existing or potential investors or licensees; provided that prior to such
disclosure each such candidate or investor will agree to be bound by obligations
of confidentiality and non-use at least equivalent in scope to those set forth
in this Section 9.3. Each Party acknowledges that it will be impossible to
measure in money the damage to the other Party if such Party fails to comply
with the obligations imposed by this Section 9.3, and that, in the event of any
such failure, the non-disclosing Party will not have an adequate remedy at law
or in damages. Accordingly, each Party agrees that injunctive relief or other
equitable remedy, in addition to remedies at law or damages, is an appropriate
remedy for any such failure and will not oppose the granting of such relief on
the basis that the disclosing Party has an adequate remedy at law. Each Party
agrees that it will not seek, and agrees to waive any requirement for, the
securing or posting of a bond in connection with the non-disclosing Party
seeking or obtaining such equitable relief.

9.4 Severability. Any provision of this Agreement which is illegal, invalid or
unenforceable shall be ineffective to the extent of such illegality, invalidity
or unenforceability, without affecting in any way the remaining provisions
hereof.

9.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
executed in and to be performed in that jurisdiction, without giving effect to
its rules regarding conflicts of laws.

9.6 Entire Agreement; Amendment. This Agreement, the ACI APA, the Exhibits and
Schedules hereto and thereto, and each additional agreement and document to be
executed and delivered pursuant hereto constitute all of the agreements of the
Parties with respect to, and supersede all prior agreements and understandings
relating to the subject matter of, this Agreement or the transactions
contemplated by this Agreement. This Agreement may not be modified or amended
except by a written instrument specifically referring to this Agreement signed
by the parties hereto.

 

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9.7 Waiver. No waiver by one Party of the other Party’s obligations, or of any
breach or default hereunder by any other Party, shall be valid or effective,
unless such waiver is set forth in writing and is signed by the party giving
such waiver; and no such waiver shall be deemed a waiver of any subsequent
breach or default of the same or similar nature or any other breach or default
by such other Party.

9.8 Interpretation; Headings. This Agreement is the result of arms-length
negotiations between the Parties hereto and no provision hereof, because of any
ambiguity found to be contained therein or otherwise, shall be construed against
a Party by reason of the fact that such Party or its legal counsel was the
draftsman of that provision. The section, subsection and any paragraph headings
contained herein are for the purpose of convenience only and are not intended to
define or limit or affect, and shall not be considered in connection with, the
interpretation of any of the terms or provisions of this Agreement. The plural
will be deemed to include the singular, and the singular will be deemed to
include the plural. The words “include,” “includes,” or “including” mean
including, by way of example and not by way of limitation. Words such as
“herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a
whole and not merely to a section or paragraph in which such words appear,
unless the context otherwise requires. The words “shall” and “will” are deemed
to be synonyms.

9.9 Counterparts. This Agreement may be executed in separate counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

9.10 Notices. Unless otherwise provided herein, any notice, report, payment, or
document to be given by one Party to the other will be in writing and will be
deemed given when actually received or when delivered personally, mailed by
certified or registered mail, postage prepaid (such mailed notice to be
effective on the date that is five (5) Business Days after the date of mailing),
sent by reputable overnight courier (such notice sent by courier to be effective
one (1) Business Day after it is deposited with such courier), or by electronic
facsimile (such notice sent by facsimile to be effective on the first Business
Day after transmission, provided that the successful transmission of the
facsimile has been confirmed) to the address below, or to such other place as
any Party may designate as to itself by written notice to the other Party.

If to Seller:

JNJ Technology Holdings, LLC

PMB 513

10940 S. Parker Road

Parker, CO 80134-9901

Facsimile: (303) 799-1588

Attention: Mike Janssen

 

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with a copy to:

Heller Ehrman LLP

Times Square Tower

7 Times Square

New York, NY 10036

Attn: Stephen Davis

Fax: (212) 763-7600

If to Buyer:

BioForm Medical, Inc.

1875 South Grant St., Suite #110

San Mateo, CA 94402

Attn: Chief Executive Officer

Fax: (650) 286-4090

with a copy to:

Ropes & Gray LLP

525 University Avenue, Suite 300

Palo Alto, CA 94301-1917

Attn: David J. Saul

Fax: (650) 566-4232

9.11 Dispute Resolution. In the event that any dispute or controversy arises
between the Parties out of or relating to this Agreement or any Ancillary
Agreement (a “Dispute”), a Party shall notify the other Party in writing of the
existence of the Dispute, and the Parties shall meet and negotiate in good faith
to attempt to resolve the matter. If such efforts do not within thirty (30) days
resolve the Dispute, the Dispute shall be resolved by binding arbitration as
provided in this Section 9.11. Buyer and Seller shall each appoint an arbitrator
of choice from a list of arbitrators recognized by the American Arbitration
Association. The appointed arbitrators shall appoint a third arbitrator from the
list, and the three arbitrators shall hear the Parties and settle the Dispute.
The proceedings shall be conducted under and governed by the Commercial Rules of
the American Arbitration Association, as in effect from time to time. All
arbitration hearings shall be conducted in the jurisdiction selected by the
Party not bringing the action, which jurisdiction shall either be the City and
County of San Francisco, California or the City and County of Denver, Colorado.
All applicable statutes of limitation shall apply to any Dispute. The
arbitrators shall have no power to award punitive or exemplary damages or to
ignore or vary the terms of this Agreement, and shall be bound to apply
controlling law. The arbitrators may award costs and expenses incurred in
connection with a Dispute (including reasonable attorney’s fees) to a Party, if
it is determined by the arbitrator that the other Party acted in bad faith. A
judgment upon the award may be entered in any court having jurisdiction.

9.12 GAAP. All questions of accounting under this Agreement shall be resolved
under generally accepted accounting principles as recognized by the American
Institute of Certified Public Accountants, as in effect from time to time,
consistently applied and maintained on a consistent basis for the applicable
Person (or Persons on a consolidated basis, as the case may be) throughout the
period indicated and consistent with such Person’s prior financial practices.

[Remainder of Page Intentionally Left Blank]

 

- 24 -

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IN WITNESS WHEREOF, each of Buyer and Seller has caused a duly authorized
representative to execute this Asset Purchase Agreement on the date first
written above.

 

BIOFORM MEDICAL, INC. By:   /s/ Steven L. Basta

Name: Steven L. Basta

Title: Chief Executive Officer

JNJ TECHNOLOGY HOLDINGS, LLC By:   /s/ Michael Janssen

Name: Michael Janssen

Title: Executive Director

[Signature Page to Asset Purchase Agreement]

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EXHIBIT A

ACI APA

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EXHIBIT B

ESCROW AGREEMENT

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EXHIBIT C

BILL OF SALE

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EXHIBIT D

INTELLECTUAL PROPERTY ASSIGNMENTS

 

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EXHIBIT E

TERMINATION AGREEMENT

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EXHIBIT C

BILL OF SALE

This BILL OF SALE is from Advanced Cosmetic Intervention, Inc., a Colorado
corporation, (“Seller”) to BioForm Medical, Inc., a Delaware corporation,
(“Buyer”).

WITNESSETH

Seller, for good and valuable consideration paid to it by Buyer, as more fully
set forth in that certain Asset Purchase Agreement made as of April 29, 2008 by
and between Buyer and Seller (the “Asset Purchase Agreement”), the receipt and
sufficiency of which are hereby acknowledged, has granted, bargained, sold,
conveyed, assigned, transferred, set over and delivered, and by these presents
does hereby grant, bargain, sell, convey, assign, transfer, set over and deliver
unto Buyer, and unto Buyer’s successors and assigns, forever, all of the
Purchased Assets, including without limitation those assets set forth on Exhibit
A attached hereto. Capitalized terms used herein and not defined herein shall
have the meanings ascribed thereto in the Asset Purchase Agreement.

TO HAVE AND TO HOLD, all and singular, the Purchased Assets are hereby sold,
assigned, transferred and delivered unto Buyer and Buyer’s successors and
assigns forever.

This Bill of Sale is in accordance with and is subject to all of the
representations, warranties, covenants, exclusions and indemnities set forth in
the Asset Purchase Agreement, all of which are incorporated herein by reference.
Seller and Buyer each acknowledge and agree that all representations and
warranties given with respect to the sale of the Purchased Assets pursuant to
this Bill of Sale are as set forth in the Asset Purchase Agreement and that no
warranties, express or implied, are provided herein and to the extent they are
provided they are hereby disclaimed. Any action or claim arising out of this
Bill of Sale shall be made only pursuant to, and subject to, Section 9 of the
Asset Purchase Agreement. Seller and Buyer each acknowledge and agree that any
dispute or controversy that arises between Seller and Buyer out of or relating
to this Bill of Sale shall be subject to Section 10.11 of the Asset Purchase
Agreement. In the event that any provision of this Bill of Sale is construed to
conflict with a provision in the Asset Purchase Agreement, the provision in the
Asset Purchase Agreement shall be deemed to be controlling.

[Remainder of Page Intentionally Left Blank.]

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IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be duly executed as
of April 29, 2008.

 

ADVANCED COSMETIC INTERVENTION, INC. a Colorado corporation   By   /s/ Paul
Maroon     Name:   Paul Maroon     Title:   Chief Executive Officer

Acknowledged:

 

BIOFORM MEDICAL, INC., a Delaware corporation   By   /s/ Steven L. Basta    
Name:   Steven L. Basta     Title:   Chief Executive Officer

BILL OF SALE

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Exhibit A

PURCHASE PRICE ALLOCATION

 

Tangible Assets

   Purchase Price
Allocation

Computer Equipment

  

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]

[*]

     [*]       

Total Computer Equip

     [*]       

Laboratory Equipment

  

[*]

     [*]

[*]

     [*]

[*]

     [*]       

Total Lab Equipment

     [*]       

All other Laboratory Equipment at ACI [*] not on capitalization table and
<$1,000

   $ [*]

All Demonstration Equipment at ACI [*]

   $ [*]

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

--------------------------------------------------------------------------------

Manufacturing Equipment

  

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]         [*]     

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]

[*]

   [*]         [*]     

Total Manufacturing Equipment

   [*]     

All other Manufacturing Equipment either at ACI [*] not on capitalization table
and <$1,000

   [*]

Inventory (at ACI [*])

  

[*]

  

[*]

  

[*]

  

[*]

  

[*]

  

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

--------------------------------------------------------------------------------

All Marketing Materials at ACI (brochures, DVD’s, training materials)

     [*]

All Lab Books and Other Notebooks

     [*]

Office Furniture & Equipment

  

[*]

     [*]

[*]

     [*]

[*]

     [*]       

Total Office Furniture & Equipment

     [*]       

Total Property, Plant & Equipment

   $ 228,162.05       

Inventory - Finished Goods

   Total Fair Value       

[*]

   $ [*]

[*]

     [*]       

Total Inventory - Finished Goods

   $ 777,968       

Recap

    

Total Property, Plant & Equipment [*]

   $ 130,486

Total Property, Plant & Equipment [*]

     97,676

Inventory - Finished Goods

     777,968

Total tangible personal property

   $ 1,006,130       

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

--------------------------------------------------------------------------------

EXHIBIT D

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (the “Assignment and Assumption
Agreement”) is made, executed and delivered as of April 29, 2008, by and between
Advanced Cosmetic Intervention, Inc., a Colorado corporation, (the “Assignor”)
and BioForm Medical, Inc., a Delaware corporation, (the “Assignee”, and together
with Assignor, the “Parties”).

WITNESSETH

WHEREAS, the Assignor and the Assignee are parties to an Asset Purchase
Agreement, dated April 29, 2008, by and between the Assignor and the Assignee
(the “Asset Purchase Agreement”), providing for, among other things, the
assignment by the Assignor and the assumption by the Assignee of certain rights,
liabilities and obligations of the Assignor, all as more fully described in the
Asset Purchase Agreement, on the terms and conditions provided in the Asset
Purchase Agreement;

NOW, THEREFORE, in connection with the Asset Purchase Agreement, for and in
consideration of the premises and the mutual covenants contained herein, and for
other good and valuable consideration, the receipt, adequacy, and legal
sufficiency of which are hereby acknowledged, the Parties do hereby agree as
follows:

WITNESSETH

1. Definitions. Capitalized terms used but not defined herein shall have the
meanings for such terms that are set forth in the Asset Purchase Agreement.

2. Assignment and Assumption. Effective upon the Closing, the Assignor hereby
assigns, sells, transfers, and sets over to the Assignee all of such Assignor’s
right, title, benefit, privileges, and interest in and to, and all of such
Assignor’s burdens, obligations, and liabilities in connection with, the
Purchased Assets and the Assumed Liabilities free and clear of all liens,
claims, licenses, pledges and encumbrances (other than those created by the
Assignee or Permitted Encumbrances), in the case of the Purchased Assets. The
Assignee hereby accepts and assumes and agrees to observe and perform all of the
duties, obligations, terms, provisions, and covenants of the Purchased Assets
and the Assumed Liabilities, and to pay and discharge all of the Assumed
Liabilities.

3. Limitations and Conflict of Terms. This Assignment and Assumption Agreement
is in accordance with and is subject to all of the representations, warranties,
covenants, exclusions and indemnities set forth in the Asset Purchase Agreement,
all of which are incorporated herein by reference. Seller and Buyer each
acknowledge and agree that all representations and warranties given with respect
to the sale of the Purchased Assets pursuant to this Assignment and Assumption
Agreement are as set forth in the Asset Purchase Agreement and that no
warranties, express or implied, are provided herein and to the extent they are
provided they are hereby disclaimed. Any action or claim arising out of this
Assignment and Assumption Agreement shall be made only

--------------------------------------------------------------------------------

pursuant to, and subject to, Section 9 of the Asset Purchase Agreement. Seller
and Buyer each acknowledge and agree that any dispute or controversy that arises
between the Seller and Buyer out of or relating to this Assignment and
Assumption Agreement shall be subject to Section 10.11 of the Asset Purchase
Agreement. In the event that any provision of this Assignment and Assumption
Agreement is construed to conflict with a provision in the Asset Purchase
Agreement, the provision in the Asset Purchase Agreement shall be deemed to be
controlling.

4. Entire Agreement. This Assignment and Assumption Agreement, the Asset
Purchase Agreement, the JNJ APA, and the other Ancillary Agreements together
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, between the Parties with respect to the
subject matter hereof and is not intended to and shall not be construed to
confer upon any persons other than the Parties any rights or remedies hereunder.

5. Amendment and Modification. This Assignment and Assumption Agreement and any
of the terms contained herein may be amended or modified by the Assignor and the
Assignee only in writing signed by each Party.

6. Assignment. This Assignment and Assumption Agreement and the rights and
obligations hereunder may only be assigned by a Party upon the written consent
of the other Party, and the obligations of such transferring Party will then
transfer to the acquiring party upon any such assignment; provided, however,
Assignor may assign this Assignment and Assumption Agreement and the rights and
obligations hereunder without the consent of Assignee to a liquidating trust
established by Assignor or its stockholders; and provided, further, that a
change of control, merger, and/or purchase of substantially all of the assets of
either Party (or, in the case of Assignee, substantially all of the assets
relating to the Product) shall not constitute an assignment requiring consent of
the other Party. This Assignment and Assumption Agreement will be binding upon
the successors and permitted assigns of the Parties and the name of a Party
appearing herein will be deemed to include the names of such Party’s successors
and permitted assigns to the extent necessary to carry out the intent of this
Agreement.

7. Governing Law. This Assignment and Assumption Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts executed in and to be performed in that jurisdiction, without
giving effect to its rules regarding conflicts of laws.

8. Counterparts. This Assignment and Assumption Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

[Remainder of Page Intentionally Left Blank.]

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IN WITNESS WHEREOF, each of the undersigned has caused this Assignment and
Assumption Agreement to be signed by its duly authorized officer as of the date
first written above.

 

ASSIGNOR:   ADVANCED COSMETIC INTERVENTION, INC.,   a Colorado corporation      
By:   /s/ Paul Maroon         Name:   Paul Maroon         Title:   Chief
Executive Officer

 

ASSIGNEE:   BIOFORM MEDICAL, INC., a Delaware corporation       By:   /s/ Steven
L. Basta         Name:   Steven L. Basta         Title:   Chief Executive
Officer

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

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EXHIBIT E

FORM OF PATENT ASSIGNMENT

WHEREAS, JNJ Technology Holdings, LLC (“Assignor”), a Colorado limited liability
company with an address of 10940 S. Parker Road, Suite 513, Parker, CO 80134, is
the owner of all rights, title, and interests in and to the patent applications
shown on the attached Exhibit 1 (the “Patents”); and

WHEREAS, BioForm Medical, Inc. (“Assignee”), a Delaware corporation with an
address of 1875 South Grant St., Suite #110, San Mateo, CA 94402, desires to
acquire the entire right, title, and interest in and to the Patents and all the
inventions and discoveries disclosed in the Patents (the “Inventions”);

NOW THEREFORE, be it known that effective as of April 29, 2008, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor hereby sells, assigns, transfers, and sets over unto
Assignee (1) the entire right, title, and interest in all countries throughout
the world in and to said Patents and Inventions, including any renewals,
revivals, reissues, reexaminations, extensions, continuations,
continuations-in-part, and divisions of said Patents and any substitute
applications therefor; (2) the entire right to file patent applications (“New
Applications”) in the name of Assignee or its designee on the aforesaid
Inventions in all countries of the world; (3) the entire right, title, and
interest in and to any patent which issued and may issue on the Inventions in
any country, and any renewals, revivals, reissues, reexaminations, and
extensions thereof, and any patents of confirmation, registration, and
importation of the same; (4) the right to sue and recover for, and the right to
profits or damages due or accrued in connection with, any and all past, present,
or future infringements of the Patents and Inventions; and (5) the entire right,
title, and interest in all convention and treaty rights of all kinds, including
without limitation all rights of priority in any country of the world, in and to
the above Patents and Inventions;

AND, Assignor hereby authorizes and requests the competent authorities to grant
and to issue any and all patents on the Inventions throughout the world to
Assignee, its successors, or assigns, whose rights, title, and interests in such
patents are the same as would have been held and enjoyed by Assignor had this
assignment, sale, and transfer not been made.

[Remainder of Page Left Blank]

 

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IN WITNESS WHEREOF, the Assignor has caused this Patent Assignment to be duly
executed by its officer thereunto duly authorized as of the              day of
April, 2008.

 

JNJ TECHNOLOGY HOLDINGS, LLC By:      

Name: Michael Janssen

Title: Executive Director

 

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STATE OF   )     : ss.:   COUNTY OF   )  

On the              day of             , 200_, before me the undersigned,
personally appeared                                              , personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

 

   Notary Public

 

3

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Acknowledgement of Assignee: BIOFORM MEDICAL, INC. By:       Name: Steven L.
Basta   Title: Chief Executive Officer

 

4

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STATE OF   )     : ss.:   COUNTY OF   )  

On the              day of             , 200_, before me the undersigned,
personally appeared                                         , personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

 

   Notary Public

 

5

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EXHIBIT F

TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT (the “Agreement”), is dated as of April 29, 2008, by
and among JNJ Technology Holdings, LLC, a Colorado limited liability company
(“JNJ”) and Advanced Cosmetic Intervention, Inc., a Colorado corporation
(“ACI”).

Simultaneously with the execution and delivery of this Agreement, JNJ and
BioForm Medical, Inc. (“BioForm”) have entered into an Asset Purchase Agreement
(the “JNJ Purchase Agreement”), providing for, among other things, the sale of
substantially all of JNJ’s business and assets.

In addition, simultaneously with the execution and delivery of this Agreement,
ACI and BioForm have entered into an Asset Purchase Agreement (the “ACI Purchase
Agreement”), providing for, among other things, the sale of substantially all of
ACI’s business and assets.

JNJ and ACI are parties to that certain Technology License Agreement dated as of
July 1, 2004 (the “Existing JNJ-ACI License”) and desire to terminate such
agreement in connection with the completion of the JNJ Purchase Agreement and
ACI Purchase Agreement.

NOW, THEREFORE, to induce BioForm to enter into, and in consideration of its
entering into, the JNJ Purchase Agreement and ACI Purchase Agreement, the
parties hereto agree as follows:

1. Agreement to Terminate and Assign. JNJ and ACI hereby terminate the Existing
JNJ-ACI License effective immediately prior to the consummation of the JNJ
Purchase Agreement and the ACI Purchase Agreement. Notwithstanding anything to
the contrary in the Existing JNJ-ACI License, upon such termination of the
Existing JNJ-ACI License, all existing rights and obligations of JNJ and ACI
pursuant to the Existing JNJ-ACI License shall be of no further force or effect
and JNJ and ACI shall not have any continuing rights, obligations or liabilities
of any nature thereunder.

2. Further Actions. JNJ and ACI hereby agree to execute and deliver such further
documents, and take such further actions, as may be required to carry out the
purposes of this Agreement.

3. Governing Law; Counterparts. This Agreement shall be governed by the laws of
the State of Colorado and may be executed in counterparts, which, when taken
together shall constitute one and the same document.

[Signatures to follow]

 

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

 

ADVANCED COSMETIC INTERVENTION, INC.,

a Colorado corporation

By:   /s/ Paul Maroon Name:   Paul Maroon Title:   Chief Executive Officer

 

JNJ TECHNOLOGY HOLDINGS, LLC,

a Colorado limited liability company

By:   /s/ Michael Janssen Name:   Michael Janssen Title:   Executive Director

Signature Page to Termination Agreement

 

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EXHIBIT G

FORM OF NON-COMPETITION WAIVER

FOR OB, PROSTATE SURGERY, AND RELATED APPLICATIONS

(insert date)

To:

CEO or CFO

BioForm Medical, Inc.

1875 South Grant Street, Suite 110

San Mateo, CA 94103

From:

(Company Name)

(Address)

I, a duly appointed officer of (insert Company Name) ( “Requestor”), hereby
agree that if Requestor engages Michael Janssen as a consultant for Requestor:

(1) Mr. Janssen will advise and assist Requestor in connection with the
development or commercialization of nerve ablation devices or related technology
only for (insert OB, prostate surgery, or related applications) applications and
will not be involved in the development or commercialization of any such
technology outside of these applications; and

(2) All products resulting from Mr. Janssen’s consulting activities (each, an
“Other Product”) will provide for a mutual incompatibility with products of
BioForm Medical, Inc. (“BioForm”) so that: (a) the Other Product’s software is
incompatible with BioForm products; (b) there is mechanical differentiation so
that the Other Product is physically incompatible with BioForm products;
(c) there is a built-in electrical incompatibility so that it is impossible to
utilize disposables from a BioForm product on the Other Product or a disposable
from the Other Product on a BioForm product; (d) the RF energy profile of the
Other Product will produce therapeutically differentiated RF deliveries than
BioForm products; (e) all disposable-based Other Products will utilize a
differentiated connector further preventing plug in or use of the Other Product
with a BioForm product; and (f) the load curve of the Other Product will be
different to ensure physiological and further incompatibility with BioForm
products.

Requestor further represents and warrants that Requestor has not entered into a
consulting or other arrangement with Mr. Janssen as of the date of this letter
and will only enter into such arrangement following the receipt of the approval
as described below.

 

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The undersigned certifies that he/she is a duly appointed officer of Requestor
and that this agreement is a binding agreement of Requestor.

 

[REQUESTOR COMPANY NAME] By:    

Name:

Title:

 

BioForm has reviewed and hereby approves the above request, solely as it relates
to Michael Janssen’s involvement with the Requestor defined above.

 

BIOFORM MEDICAL, INC. By:    

Name:

Title: