Document:

Exhibit
10.27

EMPLOYMENT AGREEMENT 

     This
EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of July 31, 2007, by
and between SurModics, Inc., a Delaware corporation (the “Company”), and Arthur
J. Tipton, Ph.D. (“Executive”).

BACKGROUND 

     A. Executive
currently serves as President and Chief Executive Officer of Brookwood
Pharmaceuticals, Inc. a Delaware corporation (“Brookwood”). 

     B. The
Company, Brookwood and others have entered into a Stock Purchase Agreement,
dated as of the date hereof, under which Brookwood became a wholly-owned
subsidiary of the Company (the “Purchase Agreement”). The date on which such
transaction closes shall be the “Effective Date” for purposes of this
Agreement.

     C. The
Company and Executive desire that Executive be employed by the Company, under
the terms of this Agreement. 

     D. It is
desirable and in the best interests of the Company to protect confidential,
proprietary, and trade secret information of the Company, to prevent unfair
competition by former executives of the Company following separation of their
employment with the Company, and to secure cooperation from former executives
with respect to matters related to their employment with the Company.

AGREEMENT 

     In
consideration of the foregoing premises and the respective agreements of the
Company and Executive set forth below, the parties, intending to be legally
bound, agree as follows: 

     1.
EMPLOYMENT. Executive’s employment
under this Agreement shall commence on the Effective Date and shall continue in
effect for three (3) years, unless earlier terminated in accordance with Section
5 of this Agreement (the “Term”). Following expiration of the Term, if Executive
then remains employed by the Company such continued employment shall be on such
terms and conditions as may be established from time to time by the
Company.

     2. POSITION AND DUTIES. During Executive’s employment under this Agreement,
Executive will have the following position,
duties, and responsibilities: 

     (a) Position with the
Company. Executive will serve as Vice
President of the Company and President of Brookwood, and will perform such
duties and responsibilities of an executive nature or a similar nature as the
Company may reasonably assign to him from time to time. 

	
      Page 1

     (b) Performance of Duties
and Responsibilities. Executive will serve
the Company faithfully using his reasonable best efforts and will devote
Executive’s full working time, attention, and efforts to the business of the
Company. Executive will follow applicable policies and procedures adopted by the
Company from time to time. Executive will not engage in other employment or
other material business activity, except as approved in writing by the Company.
Executive hereby represents and confirms that Executive is under no contractual
or legal commitments that would prevent him from fulfilling Executive’s duties
and responsibilities as set forth in this Agreement. Notwithstanding the
foregoing, it shall not be a violation of this Section 2 for Executive to (i)
serve on civic or charitable boards or committees, (ii) deliver lectures or
fulfill speaking engagements (provided that such activities do not relate to the
business or operations of the Company, in which case any such activities by
Executive must be consistent with Company policies and practices with respect to
lectures and/or public communications), (iii) with the prior written consent of
the Company, which shall not be unreasonably withheld, serve on boards or
committees of for-profit entities that do not compete with the Company, or (iv)
manage personal investments, in each case so long as such activities do not
materially interfere with the performance of Executive’s responsibilities and
duties hereunder and are not inconsistent with Executive’s obligations under
this Agreement, any exhibits hereto, or any other written agreement that may be
entered into by the Company and Executive. 

     3. COMPENSATION. During Executive’s employment under this Agreement,
Executive will be provided with the following
compensation and benefits: 

     (a) Base Salary. The Company will pay to
Executive for services provided hereunder a base salary at an annualized rate of
$275,000.00, which base salary will be paid in accordance with the Company’s
normal payroll policies and procedures, but in any event not less frequently
than monthly. The Company’s board of directors or authorized committee of the
board (the “Board”) will review Executive’s performance on an annual basis and
determine any adjustments to Executive’s base salary in its sole discretion;
provided, however, that no pay adjustment shall occur before October 1,
2008.

     (b) Bonus. For fiscal year 2007, Executive
shall continue to participate in the Brookwood bonus program based on
performance through December 31, 2007. Thereafter, commencing January 1, 2008, Executive shall be entitled to
participate in the Company’s Incentive Compensation Program, or such replacement
program as in effect from time to time for senior managers of the Company of
comparable position and status (any such program a “Company Incentive Program”),
based upon achievement of objectives established by the Company and/or the
Board. For fiscal year 2008, Executive’s
participation in the Company’s Incentive Compensation Program shall be pro-rated
based on his participation in the program during the period from January 1, 2008
through September 30, 2008. Executive must be employed by the Company on the
date of payment of any bonus award in order to be eligible for any such award.

	
      Page 2

     (c) Initial Equity Grant. Within 90 days
after commencement of Executive’s employment with the Company, the Company will
grant to Executive equity awards with an aggregate value, as determined by the
Board in accordance with Section 7.8(a) of the Purchase Agreement, equal to
$900,000, 70% in the form of restricted stock and 30% in the form of performance
shares under the Company’s Performance Share Award Program. The awards shall be
pursuant to the Company’s 2003 Equity Incentive Plan and definitive restricted
stock and/or performance share agreements to be entered into between the Company
and Executive.

     (d) Other Equity. Executive shall be
entitled to participate in the Company’s Performance Share Award Program as in
effect from time to time for officers of the Company of comparable position and
status, upon such terms and conditions established by the Board (the “PSA
Program”).

     (e) Employee Benefits. Executive will be
entitled to participate in all employee benefit plans and programs (including
without limitation vacation time off) generally available to executive employees
of the Company to the extent that Executive meets the eligibility requirements
for each individual plan or program. Executive’s participation in any plan or
program will be subject to the provisions, rules, and regulations of, or
applicable to, the plan or program. The Company provides no assurance as to the
adoption or continuation of any particular employee benefit plan or program.
With respect to any employee benefit plans or programs of the Company that base
the availability, amount or duration of benefits on time of service, the Company
shall grant to Executive credit for the period of time he was employed by
Brookwood and SRI prior to the Effective Date. 

     (f) Expenses. The Company will promptly
reimburse Executive for all reasonable and necessary out-of-pocket business,
travel, and entertainment expenses incurred by Executive in the performance of
Executive’s duties and responsibilities to the Company, subject to the Company’s
normal policies and procedures for expense verification and documentation.

     4. RELATED AGREEMENTS. 

     (a) Confidential
Information/Restrictive Covenants. In
consideration for Executive’s employment hereunder, the compensation and
benefits to be provided hereunder and otherwise in connection with Executive’s
employment with the Company, Executive agrees to execute a Non-Competition,
Invention, and Non-Disclosure Agreement in the form attached as Exhibit A hereto.

     (b) Change of
Control. In recognition of Executive’s key
position with the Company, the uncertainty that can be created for executives in
the event of a change of control and the Company’s desire to retain Executive’s
full attention and commitment to the Company in the event of any potential
change of control of the Company, the Company and Executive agree to execute a
Change of Control Agreement in the form attached as Exhibit B hereto. 

	
      Page 3

     5. TERMINATION OF EMPLOYMENT.

     (a) The Executive’s employment with the Company under this
Agreement will terminate upon: 

     (i) expiration of the Term;

     (ii) the Company providing written
notice to Executive of the termination of Executive’s employment, effective as
of the date stated in such notice; 

     (iii) the Company’s receipt of
Executive’s written resignation from the Company, effective as of the date
indicated in such resignation or at such earlier date as the Company in its sole
discretion shall determine; 

     (iv) Executive’s Disability; or

     (v) Executive’s death. 

     (b) The date upon which Executive’s termination of employment
with the Company is effective is the “Termination Date.” 

     6. PAYMENTS UPON TERMINATION OF
EMPLOYMENT. 

     (a) Termination Without
Cause or For Good Reason. If, prior to the
expiration of the Term, Executive’s employment with the Company is terminated
(i) by the Company for any reason other than for Cause or (ii) by Executive for
Good Reason, then, in addition to such base salary, paid time off and other
vested benefits that have been earned but not paid to Executive as of the
Termination Date (collectively, the “Earned Compensation”), the Company will:

     (i) pay to Executive severance pay
in an amount equal to Executive’s then-current annual base salary (but such
amount not to exceed two times the annual compensation limit in effect as of the
Termination Date pursuant to Section 401(a)(17) of the Internal Revenue Code),
payable in equal installments on the Company’s regular payroll schedule over a
12-month period following the Termination Date; and 

     (ii) if Executive is eligible for
and elects continuation of group medical and/or dental insurance coverage with
the Company following the Termination Date in accordance with applicable laws
and plans, reimburse Executive for the premium costs of such continuation
coverage, at the same level of coverage that was in effect as of the Termination
Date, at the election of Executive for up to 18 consecutive months following the
Termination Date or, if earlier, until such continuation coverage is no longer
available to Executive under applicable laws and plans. 

	
      Page 4

     (b) Other
Termination. If prior to the expiration of
the Term Executive’s employment with the Company is terminated by reason of:

     (i) Executive’s resignation for any
reason other than Good Reason,

     (ii) termination of Executive’s
employment by the Company for Cause, or 

     (iii) Executive’s death or
Disability,

then the
Company will pay to Executive, or Executive’s beneficiary or estate, as the case
may be, the Earned Compensation. 

     (c) Cause. “Cause” hereunder
means:

     (i) Executive’s commission of any
act constituting a felony, or Executive’s conviction or guilty or no contest
plea to any criminal misdemeanor or more serious act; 

     (ii) any intentional or willful act
of fraud or dishonesty by Executive related to or connected with Executive’s
employment by the Company or otherwise likely to cause material harm to the
Company or its reputation;

     (iii) the willful or continued
failure, neglect, or refusal by Executive to perform Executive’s employment
duties with the Company or to fulfill Executive’s fiduciary responsibilities to
the Company, which failure, neglect, or refusal has not been cured by Executive
within 15 days after written notice thereof to Executive from the
Company;

     (iv) a material violation by
Executive of the Company’s policies or codes of conduct; or 

     (v) the willful and/or material
breach of this Agreement by Executive. 

     (d) Disability. “Disability”
hereunder means the inability of Executive to perform on a full-time basis the
duties and responsibilities of Executive’s employment with the Company by reason
of Executive’s illness or other physical or mental impairment or condition, if
such inability continues for an uninterrupted period of 120 days or more during
any 180-day period. A period of inability is “uninterrupted” unless and until
Executive returns to full-time work for a continuous period of at least 30 days.

     (e) Good Reason. Resignation for “Good Reason”
hereunder means that Executive has provided written notice to the Company within
90 days following the occurrence of any of the following events, which notice
describes the event giving rise to the resignation, and the Company has not
cured the event within 30 days after receiving such notice from Executive:

	
      Page 5

     (i) the assignment of Executive
without Executive’s consent to a position with material responsibilities or
duties of a lesser status or degree than the position of Vice President of the
Company; 

     (ii) the relocation of Executive’s
principal office for Company business, without Executive’s consent, to a
location more than fifty (50) miles outside the Executive’s work location as of
the Effective Date; or 

     (iii) a material breach of this
Agreement by the Company. 

     (f) Other
Obligations. In the event of termination of
Executive’s employment, the sole obligation of the Company under this Agreement
will be its obligation to make the payments called for by Sections 6(a) or 6(b)
hereof, as the case may be, and the Company will have no other obligation to
Executive or to Executive’s beneficiary or estate. 

     (g) Conditions. Notwithstanding the
foregoing provisions of this Section 6, the Company will not be obligated to
make any payments to Executive under Section 6(a) hereof unless: (i) Executive
has signed a release of claims in favor of the Company and its affiliates and
related entities, and their directors, officers, insurers, employees and agents;
(ii) all applicable rescission periods provided by law for releases of claims
shall have expired and Executive shall have signed and not rescinded the release
of claims; and (iii) Executive is in strict compliance with the terms of this
Agreement as of the dates of such payments. 

     (h) Offset. In the event that Executive is eligible for any benefits
following termination of employment under the Change of Control Agreement
referenced in Section 4(b) above, or under any other agreement, plan, program or
applicable law relating to the provision of notice or payment of severance or
similar pay and benefits following termination of Executive’s employment with
the Company, then the amounts payable by the Company under Section 10(a) of this
Agreement shall be reduced by all notice, pay and benefits to which Executive is
entitled under such other agreement, plan, program or law. 

     7. OTHER POST-TERMINATION
OBLIGATIONS. 

     (a) Immediately upon termination of Executive’s employment
with the Company for any reason, Executive will resign all positions then held
as a director or officer of the Company and of affiliated entity of the Company.

     (b) Upon termination of Executive’s employment with the
Company, Executive shall promptly deliver to the Company any and all Company
records and any and all Company property in Executive’s possession or under
Executive’s control, including without limitation manuals, books, blank forms,
documents, letters, memoranda, notes, notebooks, reports, printouts, computer
disks, computer tapes, source codes, data, tables or calculations and all copies
thereof, documents that in whole or in part contain any trade secrets or
confidential, proprietary or other secret information of the Company and all
copies thereof, and keys, access cards, access codes, passwords, credit cards,
personal computers, telephones, and other electronic equipment belonging to the
Company. 

	
      Page 6

     (c) Following termination of Executive’s employment with the
Company for any reason, Executive will, upon reasonable request of the Company
or its designee, cooperate with the Company in connection with the transition of
Executive’s duties and responsibilities for the Company; consult with the
Company regarding business matters that Executive was directly and substantially
involved with while employed by the Company; and be reasonably available, with
or without subpoena, to be interviewed, review documents or things, give
depositions, testify, or engage in other reasonable activities in connection
with any litigation or investigation, with respect to matters that Executive
then has or may have knowledge of by virtue of Executive’s employment by or
service to the Company or any related entity; provided, however, that (i) the
Company shall not unreasonably request such cooperation of Executive, (ii) the
Company shall reimburse Executive or pay directly any reasonable expenses
actually incurred in connection with such cooperation and assistance by
Executive, and (iii) Executive shall not be required to assist or cooperate with
the Company to the extent such assistance or cooperation would prevent Executive
from performing, or would materially interfere with Executive’s performance of,
the duties or responsibilities of his then-current occupation. 

     (d) Executive will not at any time
disparage, defame, or besmirch the reputation, character, image, products, or
services of the Company or any of its affiliates, or the reputation or character
of any of its current or former directors, officers, employees, or agents;
provided that nothing in this Section 11(d) is intended to prevent or interfere
with Executive making any required or reasonable communications with, or
providing information to, any governmental, law enforcement, or stock exchange
agency or representative, or in connection with any governmental investigation,
court, administrative or arbitration proceeding. 

     (e) The Company will not at any time disparage, defame, or
besmirch the reputation, character, or image of Executive; provided that nothing
in this Section 11(e) is intended to prevent or interfere with the Company
making any required or reasonable communications with, or providing information
to, any governmental, law enforcement, or stock exchange agency or
representative, or in connection with any governmental investigation, court,
administrative or arbitration proceeding. 

    
12. MISCELLANEOUS. 

     (a) Tax Withholding. The Company
may withhold from any amounts payable under this Agreement such federal, state,
and local income and employment taxes as the Company shall reasonably determine
are required to be withheld pursuant to any applicable law or regulation.

	
      Page 7

     (b) Section 409A. This Agreement is
intended to satisfy the requirements of Section 409A(a)(2), (3) and (4) of the
Internal Revenue Code of 1986, as amended (the “Code”), including current and
future guidance and regulations interpreting such provisions, and should be
interpreted accordingly.

     (c) Governing
Law. All matters relating to the
interpretation, construction, application, validity, and enforcement of this
Agreement will be governed by the laws of the State of Minnesota, without giving effect to
any choice or conflict of law provision or rule, whether of the State of
Minnesota or any other jurisdiction, that would cause the application of laws of
any jurisdiction other than the State of Minnesota. 

     (d) Jurisdiction and
Venue. The parties consent to jurisdiction of
the courts of the State of Minnesota
and/or the United States District Court,
District of Minnesota, for the purpose of resolving all issues of law, equity,
or fact arising out of or in connection with this Agreement. Any action
involving claims of a breach of this Agreement must be brought in such courts.
Each party consents to personal jurisdiction over such party in the state and/or
federal courts of Minnesota and hereby waives any defense of lack of personal
jurisdiction.

     (e) Waiver of Jury Trial. To the extent
permitted by law, the parties waive any and all rights to a jury trial with
respect to any dispute arising out of or relating to this Agreement. 

     (f) Entire Agreement. This Agreement
contains the entire agreement of the parties relating to Executive’s employment
with the Company and supersedes all prior agreements and understandings with
respect to such subject matter, and the parties hereto have made no agreements,
representations, or warranties relating to the subject matter of this Agreement
that are not set forth herein.

     (g) No Violation of Other Agreements.
Executive hereby represents and agrees that neither (i) Executive’s entering
into this Agreement nor (ii) Executive’s carrying out the provisions of this
Agreement, will violate any other agreement (oral, written, or other) to which
Executive is a party or by which Executive is bound.

     (h) Assignment. This Agreement shall not
be assignable, in whole or in part, by either party without the written consent
of the other party, except that the Company may, without the consent of
Executive, assign its rights and obligations under this Agreement to the Buyer
or any of its affiliated entities. 

     (i) Amendments. No amendment or
modification of this Agreement will be effective unless made in writing and
signed by the parties hereto. 

	
      Page 8

     (j) Counterparts. This Agreement may be
executed by facsimile signature and in any number of counterparts, and such
counterparts executed and delivered, each as an original, will constitute but
one and the same instrument. 

     (k) Severability. To the extent that any
portion of any provision of this Agreement is held invalid or unenforceable, it
will be considered deleted herefrom and the remainder of such provision and of
this Agreement will be unaffected and will continue in full force and effect.

     (l) Survival. The provisions of this Agreement that by their terms or
implication extend beyond the Term shall survive the termination or expiration
of the Term and termination of Executive’s employment with the Company for any
reason. 

     (m) Captions and
Headings. The captions and paragraph headings
used in this Agreement are for convenience of reference only and will not affect
the construction or interpretation of this Agreement or any of the provisions
hereof. 

     (n) Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
(i) delivered personally; (ii) sent by facsimile or other similar electronic
device with confirmation; (iii) delivered by reliable overnight courier; or (iv)
three business days after being sent by registered or certified mail, postage
prepaid, and in the case of (iii) and (iv) addressed as follows: 

[Insert contact
information] 

 

[Signature page follows] 

	
      Page 9

     The parties have
executed this Agreement effective as of the date set forth in the first
paragraph. 

		SURMODICS, INC. 
			  
			 
			  
		By:  	/s/ Bruce J Barclay 
			     Bruce J Barclay  
			     Its President and Chief Executive
      Officer  
		 	 
			 
			 
			 
			/s/ Arthur J. Tipton,
      Ph.D  
			     Arthur J. Tipton, Ph.D. 
    

	
      Page 10 

NON-COMPETITION, INVENTION,
NON-DISCLOSURE AGREEMENT 

THIS AGREEMENT is  made between
SurModics, Inc., a Minnesota corporation (hereinafter “SurModics”) and
Arthur J. Tipton, Ph.D. (hereinafter “Employee”) and shall become binding upon
Employee’s signing. 

	I.     	DEFINITIONS
	 
	 	A.     	“SurModics” means
      SurModics, Inc., and any existing or future SurModics subsidiaries or
      affiliates, owned or controlled, directly or indirectly, by SurModics, and
      any successor in interest to SurModics.
	 
	 	B.	“Confidential
      Information” means information not generally known about SurModics’
      processes and products, including but not limited to information relating
      to research, development, manufacturing, purchasing, accounting,
      engineering, marketing, merchandising, licensing and selling. All
      information disclosed to Employee or to which Employee obtains access or
      creates while employed by SurModics, which Employee has a basis to believe
      to be Confidential Information, or which is treated by SurModics as
      Confidential Information, shall be presumed to be Confidential
      Information.
	 
	 	C.	“Inventions” means
      discoveries, developments, improvements and ideas (whether or not shown or
      described in writing or reduced to practice and whether patentable or
      not):
	 
			1.     	relating to SurModics’
      business, including but not limited to manufacturing, research,
      development or other investigations; or
	 
	 	 	2.	relating to ideas, work, or
      investigations conceived or carried on by Employee, solely or jointly with
      others, in connection with or because of Employee’s employment by
      SurModics, or about which Employee acquires Confidential
      Information.
	 
	 	D.	“Copyrightable Works”
      means all subject matter which is copyrightable and created by Employee,
      alone or jointly with another, within the scope of Employee’s employment
      with SurModics or using SurModics’ time, equipment, or Confidential
      Information.
	 
	 	E.	“Competitor” means any
      person or entity that researches, develops, produces, markets, sells,
      licenses, or leases products or processes that are the same as or similar
      to, or compete with, products or processes that Employee worked on or was
      involved with at SurModics, or about which Employee learned Confidential
      Information.
	 
	 	F.	“Competing Product”
      means any product or process by a Competitor that is the same or similar
      to, or competes with, any product or process that Employee worked on or
      was involved with at SurModics, or about which Employee learned
      Confidential Information.
	 
	II.	EMPLOYEE IS EMPLOYED OR
      DESIRES TO BE EMPLOYED BY SURMODICS IN A CAPACITY IN WHICH EMPLOYEE MAY
      RECEIVE OR CONTRIBUTE TO CONFIDENTIAL INFORMATION. EMPLOYEE MAY BECOME
      FAMILIAR WITH UNIQUE BUSINESS METHODS AND PROCEDURES USED BY SURMODICS AND
      MAY BECOME FAMILIAR WITH SURMODICS’ CUSTOMERS. IN CONSIDERATION OF SUCH
      EMPLOYMENT OR CONTINUED EMPLOYMENT AND IN CONSIDERATION OF BEING GIVEN
      ACCESS TO CONFIDENTIAL INFORMATION IT IS HEREBY AGREED:
	 
	       	A.	Except as specifically
      disclosed on the form entitled “Conflict of Interest Disclosure
      Statement”, Employee warrants that no conflicts of interest exist which
      prevent the Employee from entering into this Agreement, including but not
      limited to:
	 
	 	 	1.	Contractual arrangements that
      restrict Employee from performing any of his or her current or anticipated
      duties at SurModics, including but not limited to confidentiality,
      non-disclosure, or noncompetition agreements and/or employee agreements
      with current and former employers or
contractors.

		
      Exhibit A
Page 1
      

NON-COMPETITION, INVENTION,
NON-DISCLOSURE AGREEMENT (Continued) 

	 	2.     	Activities for, or duties to,
      any third party for which Employee will receive monetary payment or
      compensation.
	 
	 	3.	Outside activities and
      involvements of employee including ownership in competing or related
      businesses or in suppliers of products or services to
    SurModics.
	 
	 	4.	The interest of any immediate
      family member of Employee in any entity that directly competes with any
      existing or planned activity of SurModics.
	 
	 	5.	Any other partnerships,
      inventions or development of Employee which may possibly interfere with
      the Employee’s current or anticipated duties at
SurModics.
	 
	         
      B.     	Employee agrees to
      refrain from using or disclosing any information to SurModics which
      Employee knows, or has reason to know, infringes any trade secret or other
      proprietary right of any third party.
	 
	          C.	With respect to any
      Invention and Copyrightable Works made, authored, conceived, or reduced to
      practice by Employee, either solely or jointly with others, 1) during
      Employee’s employment by SurModics, whether or not during normal working
      hours or whether or not at SurModics’ premises, or 2) within one (1) year
      after termination of such employment, Employee agrees:
	 
	 	1.	To keep accurate, complete and
      timely records (in accordance with SurModics’ policies) for such
      Inventions and Copyrightable Works, which records shall be SurModics’
      property and be retained on SurModics’ premises.
	 
	 	2.	To promptly and fully disclose
      and describe such Inventions in writing to SurModics.
	 
	 	3.	To assign (and Employee hereby
      does assign) and to hold in trust for the sole right and benefit of
      SurModics all of Employee’s right, title and interest in and to such
      Inventions and to any applications for letters patent pertaining to such
      Inventions in all countries and to any letters patent granted upon such
      Inventions in all countries.
	 
	 	4.	Upon SurModics’ request, to
      acknowledge and deliver promptly to SurModics (without charge to
      SurModics) such written instruments, and to do such other acts as may be
      necessary or appropriate in the opinion of SurModics, to permit SurModics
      to obtain, maintain and enforce its rights in such Inventions and
      Copyrightable Works and to vest the entire right and title thereto in
      SurModics.
	 
	          D.	Notwithstanding any
      other provision of this Agreement, it is further agreed, and Employee is
      hereby notified that the above agreement to and assignment of Inventions
      to SurModics does not apply to any discoveries, developments, improvements
      and ideas for which no equipment, supplies, facility or trade secrets of
      SurModics was used and which was developed entirely on Employee’s own
      time, and
	 
	 	1.	Which does not relate: a)
      directly to the business of SurModics, or b) to SurModics’ actual or
      demonstrably anticipated research or development; or
	 
	 	2.	Which does not result from any
      work performed by Employee for SurModics.
	 
	          E.	Employee agrees to
      maintain in strict confidence and make no use of any Confidential
      Information for the benefit of any party other than SurModics.
      Furthermore, except as necessary for Employee to perform his or her duties
      under this Agreement, Employee shall not, without written authorization of
      SurModics or its legal counsel, directly or indirectly divulge
      Confidential Information to or for any third party. SurModics and Employee
      agree that any Confidential Information received by the Employee shall not
      be governed by this Agreement if the Employee can demonstrate by clear and
      convincing documentary evidence that such Confidential
    Information:
	 
	 	1.	was lawfully in the possession
      of the Employee prior to lawfully obtaining it from SurModics;
      or
	 
	 	2.	is or becomes part of the
      public knowledge or literature through no act or failure to act of the
      Employee; or

		
      Page 2

NON-COMPETITION, INVENTION,
NON-DISCLOSURE AGREEMENT (Continued) 

	 	
      3.     
	is or becomes available to the
      Employee from an unrestricted third party without breach of a confidential
      relationship.
	 
	          F.     	Upon termination of
      Employee’s employment with SurModics, Employee agrees that all SurModics’
      property, including but not limited to all records containing Confidential
      Information and copies thereof, which are in Employee’s possession,
      whether prepared by Employee or others, will be left with or delivered to
      Employee’s supervisor.
	 
	          G.	Except as specifically
      disclosed on the form entitled “Inventions and Developments Prior to
      Employment with SurModics”, reviewed and signed by both Employee and
      SurModics, Employee will not assert any rights under any Inventions as
      having been made or acquired by Employee prior to the employment of
      Employee by SurModics.
	 
	          H.	Employee agrees that
      during Employee’s employment and for a period of two (2) years immediately
      following termination of employment with SurModics, Employee will not
      render services anywhere in the United States, directly or indirectly, to
      or for any Competitor. Provided, however, that Employee may render
      services for a Competitor during the two-year period following termination
      of Employee’s employment with SurModics if: (1) Employee’s services do not
      include any responsibilities for, or in connection with, a Competing
      Product at any time during such two-year period, (2) such services will
      not at any time involve the use or disclosure, or likely use or
      disclosure, of Confidential Information, and (3) SurModics receives
      written assurances satisfactory to it from the Competitor and Employee
      that Employee’s services for the Competitor will not violate this
      Agreement and that Competitor has received a copy of this Agreement.
      “Render services” as used in this paragraph shall include directly or
      indirectly owning, managing, operating, controlling, being employed by,
      providing services to, consulting for, or otherwise participating with,
      any Competitor.
	 
	          I.	Employee agrees that,
      during Employee’s employment and for a period of two (2) years immediately
      following termination of Employee, Employee shall not, directly or
      indirectly, sell, or solicit for the purpose of selling, any Competing
      Product to any SurModics’ customer or potential customer (1) with whom
      Employee (or his/her supervisees) had contact on SurModics’ behalf within
      the last two (2) years of employment or (2) about whom Employee received
      or contributed Confidential Information during Employee’s employment with
      SurModics. For purposes of this paragraph “sell” or “selling” shall
      include selling, leasing, marketing, licensing, or otherwise providing
      products or services.
	 
	          J.	Employee agrees that
      during Employee’s employment and for a period of two (2) years immediately
      following termination of employment with SurModics, Employee will not hire
      or solicit for the purpose of hiring or inducing to leave SurModics, any
      SurModics employee. For purposes of this paragraph, “SurModics employee”
      shall include any current SurModics employee and any person who was
      employed by SurModics at any time during the last six (6) months of
      Employee’s employment.
	 
	          K.	Employee agrees that
      the restrictions and obligations contained in this Agreement shall survive
      termination of Employee’s employment with SurModics and shall apply to
      Employee regardless of the reason for termination of Employee’s
      employment, whether voluntary or involuntary. Employee agrees Employee’s
      employment with SurModics is at will and that nothing in this Agreement
      alters Employee’s at-will employment.
	 
	          L.	Employee and SurModics
      acknowledge and agree that SurModics informed Employee, as part of the
      offer of employment and prior to Employee’s accepting employment with
      SurModics, that noncompetition, invention and confidentiality provisions
      would be required as part of the terms and conditions of Employee’s
      employment. Employee and SurModics further acknowledge and agree that the
      geographic and duration restrictions set forth in the above noncompetition
      provisions have been carefully considered and negotiated between Employee
      and SurModics. Employee and SurModics agree that the restrictions
      contained in this Agreement are reasonable and will not unduly restrict
      Employee in securing other employment in the event of Employee’s
      termination.
	 
	          M.	SurModics’ action in
      not enforcing a breach of any part of this Agreement shall not constitute
      a waiver or prevent SurModics from enforcing the Agreement as to such
      breach or any other breach of this
Agreement.

		
      Page 3

NON-COMPETITION, INVENTION,
NON-DISCLOSURE AGREEMENT (Continued) 

	          N.     	Employee expressly acknowledges
      and agrees that any violation or threatened violation of any term of this
      Agreement shall entitle SurModics to issuance of a temporary restraining
      order and/or other injunction against Employee (in addition to any other
      legal or equitable remedies available to SurModics) and to collect from
      Employee SurModics’ reasonable attorney’s fees incurred in bringing such
      legal or equitable action or otherwise enforcing the terms and conditions
      of the Agreement.
	 
	          O.	If any term of this Agreement is
      deemed unenforceable, void, voidable or illegal, SurModics and Employee
      agree that a court of competent jurisdiction shall modify such term to
      make it enforceable to the maximum extent possible and thereafter enforce
      such term. If such term cannot be so modified, such term shall be deemed
      severable from all other terms of this Agreement and all other such terms
      shall otherwise continue in full force and effect.
	 
	          P.	The terms of the Agreement shall
      bind and inure to the benefits of SurModics and its successors and
      assigns.
	 
	          Q.	This Agreement incorporates the
      entire understanding between the parties as to its subject matter and may
      only be cancelled, modified, or otherwise changed by written agreement
      signed by SurModics’ authorized officer.
	 
	          R.	This Agreement shall be construed
      and enforced in accordance with the laws of the State of
    Minnesota.

IN WITNESS WHEREOF, SurModics and
Employee have caused this Agreement to be executed in the manner appropriate for
each. 

	By: 
    	/s/ Arthur J. Tipton, Ph.D 
    	     	31 July 2007 
	  	Employee Signature  	  	Date 
	  
	  
	Printed
      Name:  	Arthur J. Tipton, Ph.D. 	  	 
	  
	  
	  
	  
	SurModics, Inc.  	  	  
	  
	  
	By: 
    	/s/ Bruce J Barclay  		July 31, 2007 
	  	Bruce J Barlcay  	  	Date 
	  	President and Chief Executive Officer  	  	  

		
      Page 4
  

CHANGE OF CONTROL
AGREEMENT 

	Parties:                    
    	SurModics,
      Inc.  
	  	(“Company”)  
	  	9924 West 74th
      Street  
	  	Eden Prairie, MN
      55344-3523 
	   
	  	Arthur J. Tipton, Ph.D. 
    
	  	(“Executive”)  
		 
		[address] 
		 
	  
	  
	Date: 	______________,
      2007  

RECITALS: 

     1. Executive
currently serves as Vice President of the Company and as President of Brookwood
Pharmaceuticals, Inc., a wholly-owned subsidiary of the Company, and Executive
has extensive knowledge and experience relating to the Company’s business.

    
2. The parties recognize that a “Change of Control” may materially change
or diminish Executive’s responsibilities and substantially frustrate Executive’s
commitment to the Company. 

    
3. The parties further recognize that it is in the best interests of the
Company and its stockholders to provide certain benefits payable upon a “Change
of Control Termination” to encourage Executive to continue in his position in
the event of a Change of Control, although no such Change of Control is now
contemplated or foreseen. 

    
4. The parties further desire to provide certain benefits payable upon a
termination of Executive’s employment following a Change of Control. 

AGREEMENTS: 

     1. Term of Agreement. Except as
otherwise provided herein, this Agreement shall commence on the date executed by
the parties and shall continue in effect until the third anniversary of the date
set forth above; provided, however, that if a Change of Control of the Company
shall occur during the term of this Agreement, this Agreement shall continue in
effect for a period of twelve (12) months
beyond the date of such Change of Control.
If, prior to the earlier of the third anniversary of this Agreement or a Change
of Control, Executive’s employment with the Company terminates for any reason or
no reason, or if Executive no longer serves as an executive officer of the
Company, this Agreement shall immediately terminate, and Executive shall not be
entitled to any of the compensation and benefits described in this Agreement.
Any rights and obligations accruing before the termination or expiration of this
Agreement shall survive to the extent necessary to enforce such rights and
obligations. 

    
2. “Change of Control.” For
purposes of this Agreement, “Change of Control” shall mean any one or more of
the following events occurring after the date of this Agreement: 

EXHIBIT B

CHANGE OF CONTROL AGREEMENT
(Continued) 

	                    (a)     	The purchase or other
      acquisition by any one person, or more than one person acting as a group,
      of stock of the Company that, together with stock held by such person or
      group, constitutes more than 50% of the total combined value or total
      combined voting power of all classes of stock issued by the Company;
      provided, however, that if any one person or more than one person acting
      as a group is considered to own more than 50% of the total combined value
      or total combined voting power of such stock, the acquisition of
      additional stock by the same person or persons shall not be considered a
      Change of Control;
	 
	                    (b)	A merger or
      consolidation to which the Company is a party if the individuals and
      entities who were shareholders of the Company immediately prior to the
      effective date of such merger or consolidation have, immediately following
      the effective date of such merger or consolidation, beneficial ownership
      (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of
      less than fifty percent (50%) of the total combined voting power of all
      classes of securities issued by the surviving entity for the election of
      directors of the surviving corporation;
	 
	                    (c)	Any one person, or more
      than one person acting as a group, acquires or has acquired during the
      twelve (12) month period ending on the date of the most recent acquisition
      by such person or persons, direct or indirect beneficial ownership (as
      defined in Rule 13d-3 under the Securities Exchange Act of 1934) of stock
      of the Company constituting thirty-five percent (35%) or more of the total
      combined voting power of all classes of stock issued by the
    Company;
	 
	                    (d)	The purchase or other
      acquisition by any one person, or more than one person acting as a group,
      of substantially all of the total gross value of the assets of the Company
      during the twelve-month period ending on the date of the most recent
      purchase or other acquisition by such person or persons. For purposes of
      this Section 2(d), “gross value” means the value of the assets of the
      Company or the value of the assets being disposed of, as the case may be,
      determined without regard to any liabilities associated with such
      assets;
	 
	                    (e)	A change in the
      composition of the Board of the Company at any time during any consecutive
      twelve (12) month period such that the “Continuity Directors” cease for
      any reason to constitute at least a fifty percent (50%) majority of the
      Board. For purposes of this event, “Continuity Directors” means those
      members of the Board who either:
	 
		(1)     	were directors at the beginning
      of such consecutive twelve (12) month period; or
	 
		(2)	were elected by, or on the
      nomination or recommendation of, at least a two-thirds (2/3) majority of
      the then-existing Board of Directors.

	                    	
      In all cases, the determination of
      whether a Change of Control has occurred shall be made in accordance with
      Internal Revenue Code of 1986, as amended (the “Code”), Section 409A and
      the regulations, notices and other guidance of general applicability
      issued thereunder.

Page 2 

CHANGE OF CONTROL AGREEMENT
(Continued) 

     3.
“Change of Control Termination.”
For purposes of this Agreement, “Change of
Control Termination” shall mean any of the following events occurring upon or
within twelve (12) months after a Change of Control: 

	                    (a)     	The termination of
      Executive’s employment by the Company for any reason, with or without
      cause, except for termination resulting from conduct by Executive
      constituting (i) a felony involving moral turpitude under either federal
      law or the law of the state of the Company’s incorporation, or (ii)
      Executive’s willful failure to fulfill his employment duties with the
      Company; provided, however, that for purposes of this clause (ii), an act
      or failure to act by Executive shall not be “willful” unless it is done,
      or omitted to be done, in bad faith and without any reasonable belief that
      Executive’s action or omission was in the best interests of the Company;
      or
	 
	                    (b)	The termination of
      employment with the Company by Executive for “Good Reason.” Such
      termination shall be accomplished by, and effective upon, Executive giving
      written notice to the Company of his decision to terminate. “Good Reason”
      shall mean a good faith determination by Executive, in Executive’s sole
      and absolute judgment, that any one or more of the following events has
      occurred, at any time during the term of this Agreement or after a Change
      of Control; provided, however, that such event shall not constitute Good
      Reason if Executive has expressly consented to such event in writing or if
      Executive fails to provide written notice of his decision to terminate
      within ninety (90) days of the occurrence of such event:
	 
		(1)     	A change in Executive’s
      reporting responsibilities, titles or offices, or any removal of Executive
      from or any failure to re-elect Executive to any of such positions, which
      has the effect of diminishing Executive’s responsibility or
      authority;
	 
	 	(2)	A reduction by the
      Company in Executive’s base salary (as increased from time to
    time);
	 
	 	(3)	A requirement imposed
      by the Company on Executive that results in Executive being based at a
      location that is outside of a twenty-five (25) radius mile of Executive’s
      prior job location;
	 
	 	(4)	Without the adoption of
      a replacement plan, program or arrangement that provides benefits to
      Executive that are equal to or greater than those benefits that are
      discontinued or adversely affected:
	 
	 	 	(A)     	The failure by the Company to
      continue in effect, within its maximum stated term, any pension, bonus,
      incentive, stock ownership, stock purchase, stock option, life insurance,
      health, accident, disability, or any other employee compensation or
      benefit plan, program or arrangement, in which Executive is or has been
      participating; or

Page 3 

CHANGE OF CONTROL AGREEMENT
(Continued) 

		(B)     	The taking of any action by the
      Company that would adversely affect Executive’s participation or
      materially reduce Executive’s benefits under any of such plans, programs
      or arrangements;
	 
	                              (5)     	Any action by the
      Company that would materially adversely affect the physical conditions in
      or under which Executive performs his employment duties; or
	 
	                              (6)	Any material breach by
      the Company of any employment agreement between Executive and the Company
      or its subsidiary.

	                              	
      Termination for “Good Reason” shall
      not include Executive’s death or a termination for any reason other than
      one of the events specified in clauses (1) through (6)
  above.

     4.
Compensation and Benefits. Subject to the limitations contained in this Agreement, upon
a Change of Control Termination, Executive shall be entitled to all of the
following compensation and benefits: 

	                    (a)     	Within five (5)
      business days after a Change of Control Termination, the Company shall pay
      to Executive:
	 
	 	(1)     	All salary and other compensation
      earned by Executive through the date of the Change of Control Termination
      at the rate in effect immediately prior to such Termination;
	 
	 	(2)	All other amounts to which
      Executive may be entitled to receive under any compensation plan
      maintained by the Company, subject to any distribution requirements
      contained in such compensation plans; and
	 
	 	(3)	A severance payment equal to one
      (1) times the average annual cash compensation paid to Executive by the
      Company (or any predecessor entity or related entity) and includible in
      Executive’s gross income for federal income tax purposes during the
      Executive’s three most recent taxable years in effect immediately prior to
      such Termination. For purposes of this paragraph, “annual cash
      compensation” shall mean the Executive’s annual base salary and cash
      bonuses. Further, for purposes of this paragraph, “predecessor entity” and
      “related entity” shall have the meaning set forth in Section 280G of the
      Internal Revenue Code of 1986, as amended, and the regulations issued
      thereunder;
	 
	                    (b)	The Company shall
      continue to provide Executive with coverage under life, health, dental or
      disability benefit plans at a level comparable to the benefits which
      Executive was receiving or entitled to receive immediately prior to the
      Termination or, if greater, at a level comparable to the benefits which
      Executive was receiving immediately prior to the event which constituted
      Good Reason. Such coverage shall continue for eighteen (18) months
      following such Change of Control Termination or, if earlier, until
      Executive is eligible to be covered for such benefits through his
      employment with another employer. The Company may, in its sole discretion,
      provide such coverage through the purchase of individual insurance
      contracts for Executive;

Page 4 

CHANGE OF CONTROL AGREEMENT
(Continued) 

	                    (c)     	All outstanding Options or Stock
      Appreciation Rights shall become immediately exercisable, and the risks of
      forfeiture on any outstanding Restricted Stock Awards or Restricted Stock
      Unit Awards shall immediately lapse. For purposes of this Agreement,
      “Option,” “Stock Appreciation Rights,” “Restricted Stock Awards” and
      “Restricted Stock Unit Awards” shall have the meaning set forth in the
      SurModics, Inc. 2003 Equity Incentive Plan, or any successor plan;
      and
	 
	                    (d)	A percentage of the shares or
      units subject to all outstanding Performance Awards shall become
      immediately vested and payable. Such percentage shall be equal to
      Executive’s average percentage achievement under all Performance Awards
      granted to Executive and for which the Performance Period ended in each of
      the three calendar years immediately prior to such Change of Control
      Termination; provided, however, that if Executive was not granted
      Performance Awards with Performance Periods ending during such entire
      three-year period, the percentage that shall become immediately vested and
      payable shall be equal to Executive’s average percentage achievement under
      all Performance Awards granted to Executive and for which the Performance
      Period ended in each of the two calendar years immediately prior to such
      Change of Control Termination; and provided, further, that if Executive
      was not granted Performance Awards with Performance Periods ending during
      such entire two-year period, the percentage that shall become immediately
      vested and payable shall equal fifty percent (50%). For purposes of this
      Agreement, “Performance Awards” and “Performance Period” shall have the
      meaning set forth in the SurModics, Inc. 2003 Equity Incentive Plan, or
      any successor plan.

	                    	
      Notwithstanding the foregoing, if
      any of the payments described in Section 4 above are subject to the
      requirements of Code Section 409A and the Company determines that
      Executive is a “specified employee” as defined in Code Section 409A as of
      the date of the Change of Control Termination, such payments shall not be
      paid or commence earlier than the date that is six months after the Change
      of Control Termination, but shall be paid or commence during the calendar
      year following the year in which the Change of Control Termination occurs
      and within 30 days of the earliest possible date permitted under Code
      Section 409A. Further, in no event shall the benefits described in Section
      4(b) extend beyond December 31st of the second calendar year
      following the calendar year in which the Change of Control Termination
      occurs.

     5.
Limitation on Change of Control Payments.
This Section 5 applies only in the event the
Company determines that this Agreement is subject to the limitations of Section
280G of the Code, or any successor provision, and the regulations issued
thereunder. In the event any Change of Control Benefit, as defined below,
payable to Executive would constitute an “excess parachute payment” as defined
in Code Section 280G, Executive shall receive a “tax gross-up” payment
sufficient to pay the initial excise tax applicable to such excess parachute
payment (but excluding the income and excise taxes, if any, applicable to the
tax gross-up payment). Such additional cash payment shall be made within sixty
(60) days following the effective date of the Change of Control. For purposes of
this Section 5, a “Change of Control Benefit” shall mean any payment, benefit or
transfer of property in the nature of compensation paid to or for the benefit of
Executive under any arrangement which is considered contingent on a Change of
Control for purposes of Code Section 280G, including, without limitation, any
and all of the Company’s salary, bonus, incentive, restricted stock, stock
option, equity-based compensation or benefit plans, programs or other
arrangements, and shall include benefits payable under this Agreement.

Page 5 

CHANGE OF CONTROL AGREEMENT
(Continued) 

     6.
Withholding Taxes. The Company shall be entitled to deduct from all payments or benefits
provided for under this Agreement any federal, state or local income and
employment-related taxes required by law to be withheld with respect to such
payments or benefits. 

     7. Successors and Assigns. This Agreement
shall inure to the benefit of and shall be enforceable by Executive, his heirs
and the personal representative of his estate, and shall be binding upon and
inure to the benefit of the Company and its successors and assigns. The Company
will require the transferee of any sale of all or substantially all of the
business and assets of the Company or the survivor of any merger, consolidation
or other transaction expressly to agree to honor this Agreement in the same
manner and to the same extent that the Company would be required to perform this
Agreement if no such event had taken place. Failure of the Company to obtain
such agreement before the effective date of such event shall be a breach of this
Agreement and shall entitle Executive to the benefits provided in Sections 4 and
5 as if Executive had terminated employment for Good Reason following a Change
in Control.

     8. Notices. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt. All notices to the Company shall be directed to the attention
of the Board of Directors of the Company. 

     9. Captions. The headings or captions set
forth in this Agreement are for convenience only and shall not affect the
meaning or interpretation of this Agreement. 

     10. Governing Law. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Minnesota.

     11. Construction. Wherever possible, each
term and provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law. If any term or provision of this
Agreement is invalid or unenforceable under applicable law, (a) the remaining
terms and provisions shall be unimpaired, and (b) the invalid or unenforceable
term or provision shall be deemed replaced by a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
unenforceable term or provision.

     12. Amendment; Waivers. This
Agreement may not be modified, amended, waived or discharged in any manner
except by an instrument in writing signed by both parties hereto. The waiver by
either party of compliance with any provision of this Agreement by the other
party shall not operate or be construed as a waiver of any other provision of
this Agreement, or of any subsequent breach by such party of a provision of this
Agreement. Notwithstanding anything in this Agreement to the contrary, the
Company expressly reserves the right to amend this Agreement without Executive’s
consent to the extent necessary or desirable to comply with Code Section 409A,
and the regulations, notices and other guidance of general applicability issued
thereunder.

Page 6 

CHANGE OF CONTROL AGREEMENT
(Continued) 

     13.
Entire Agreement. This Agreement sets forth Executive’s sole and exclusive remedy with
respect to severance benefits payable to Executive upon a Change of Control
Termination, and supersedes all prior or contemporaneous negotiations,
commitments, agreements (written or oral) and writings between the Company and
Executive with respect to the subject matter hereof, including but not limited
to any negotiations, commitments, agreements or writings relating to any
severance benefits payable to Executive, and constitutes the entire agreement
and understanding between the parties hereto. All such other negotiations,
commitments, agreements and writings will have no further force or effect, and
the parties to any such other negotiation, commitment, agreement or writing will
have no further rights or obligations thereunder. For the sake of clarity, in
the event Executive’s employment with the Company is terminated without cause,
and such termination is not a Change of Control Termination, Executive may be
entitled to benefits pursuant to Executive’s Employment Agreement dated
_______________, 2007.

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

    
15. Arbitration. Any dispute arising out of or relating to this Agreement or
the alleged breach of it, or the making of this Agreement, including claims of
fraud in the inducement, shall be discussed between the disputing parties in a
good faith effort to arrive at a mutual settlement of any such controversy. If,
notwithstanding, such dispute cannot be resolved, such dispute shall be settled
by binding arbitration. Judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. The arbitrator shall be a
retired state or federal judge or an attorney who has practiced securities or
business litigation for at least 10 years. If the parties cannot agree on an
arbitrator within 20 days, any party may request that the chief judge of the
District Court for Hennepin County, Minnesota, select an arbitrator. Arbitration
will be conducted pursuant to the provisions of this Agreement, and the commercial arbitration rules of the American
Arbitration Association, unless such rules are inconsistent with the provisions
of this Agreement. Limited civil discovery shall be permitted for the production
of documents and taking of depositions. Unresolved discovery disputes may be
brought to the attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. Unless otherwise ordered by the
arbitrator, the parties shall share equally in the payment of the fees and
expenses of the arbitrator. The arbitrator may award to the prevailing party, if
any, as determined by the arbitrator, all of the prevailing party’s costs and
fees, including the arbitrator’s fees, and expenses, and the prevailing party’s
travel expenses, out-of-pocket expenses and reasonable attorneys’ fees. Unless
otherwise agreed by the parties, the place of any arbitration proceedings shall
be Hennepin County, Minnesota. 

[signature page follows]

Page 7 

CHANGE OF CONTROL AGREEMENT
(Continued) 

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

		SURMODICS, INC.  
		 
		 
		By: 
    	 
		 	     Its 	 
	 			
	 			
		 
		Executive  

Page 8Exhibit
10.28

PURCHASE
AGREEMENT 

     THIS
AGREEMENT is made and entered into this 24th day of August, 2007, by and between
SurModics, Inc., a Minnesota corporation, with its principal place of business
at 9924 West 74th Street, Eden Prairie, MN 55344 (hereinafter called
“Purchaser”), and Vest Mykyng LLC, a Minnesota limited liability company, with
its principal place of business at 6138 Arctic Way, Edina, Minnesota 55436
(hereinafter called “Seller”). 

     WITNESSETH THAT, WHEREAS: 

     A. Seller
is the owner of the parcel of land consisting of approximately 4.92 acres, which
is described on Exhibit A attached hereto, and all easements, rights of way,
privileges, appurtenances, and rights to same belonging to or enuring to the
benefit of said parcel of land or its owner (hereinafter called the “Land”)
lying and being in the City of Eden Prairie, County of Hennepin, and State of
Minnesota. 

     B. Seller desires to sell to
Purchaser, and Purchaser desires to purchase from Seller, subject to the terms, covenants and conditions hereinafter
contained: 

     1. The Land, together with any improvements thereon and
appurtenances thereto; 

     2. All rights appurtenant to the Land as to any roadways
adjacent to the Land; and 

     3. All right, title and interest of Seller in and to all
easements of record benefiting the Land (or the owner or users thereof) over
other property, if any (such property hereinafter is collectively called the
“Subject Property”). 

     NOW,
THEREFORE, in consideration of the foregoing, and in consideration of the mutual
covenants herein contained, which each of the parties hereto acknowledges as
adequate and sufficient, it is hereby agreed as follows: 

     1.
Purchase and Permitted Encumbrances. Subject to the terms and conditions
herein, Seller does hereby agree to sell to Purchaser, and Purchaser does hereby
agree to purchase from Seller, the Subject Property, subject only to the
following encumbrances (hereinafter called “Permitted Encumbrances”):

     (a) Building, zoning and subdivision ordinances, and State and
Federal regulations, subject to the other terms and conditions herein in respect
thereto. 

     (b) Real estate taxes and installments of special assessments
which are not yet due and payable as of the Closing Date. Seller and Purchaser
shall allocate/prorate real estate taxes and special assessments (including
interest included in such installments) payable in the year of Closing in the
manner provided in Subparagraph 12(c) hereof. 

     (c) Those easements, encumbrances, and restrictions set forth
on Exhibit B and the title commitment provided for herein which are not objected
to by Purchaser in connection with Purchaser’s examination of title and survey
and made a part hereof and such other easements, encumbrances and restrictions
as may be approved or waived by Purchaser pursuant to the terms of this
Agreement. 

     2.
Representations of Seller; “As Is”
Purchase. Except as disclosed on Exhibit D
attached hereto (“Seller’s Disclosure”) Seller states, warrants and represents
as of the date hereof as follows: 

     (a) Seller has full right and authority to execute and deliver
this Agreement and all documents and instruments required hereunder to be
executed and delivered by Seller. 

     (b) Neither the entering into of this Agreement nor the
consummation of the transaction contemplated hereby will constitute or result in
a violation or breach by Seller of any judgment or decree issued against or
imposed upon Seller, or of any agreement to which Seller is a party or which
binds the Subject Property. 

     (c) To Seller’s knowledge, there are no underground storage
tanks on the Subject Property. 

     (d) Seller is neither a “foreign person” nor a “foreign
corporation” (as those terms are defined in Section 1445 of the Internal Revenue
Code of 1986, as amended). 

     (e) To Seller’s knowledge, there are no wells or private
sewage disposal or septic systems on the Subject Property. 

     (f) To Seller’s knowledge, no environmental reports have been
made or prepared in connection for the Subject Property except those certain
reports and correspondence listed in the Disclosure and Disclosure Documents
attached hereto as Exhibit D, true and complete copies of which Seller has
delivered to Purchaser; provided, however, Seller discloses that certain dumping
may have occurred in approximately the early 1980s and believes any
contamination in connection therewith was cleaned up in accordance with law and
reports may have been generated in connection therewith, copies of which Seller
cannot locate in his possession. 

2 

     (g) Seller has received no notice of condemnation of any
portion of the Subject Property from any governmental authority. 

     (h) Solely for purposes of satisfying the requirements of
Minn. Stat. § 115.55, to Seller’s knowledge there is no “individual sewage
treatment system” (within the meaning of that statute) on or serving the Subject
Property. 

     (i) To Seller’s knowledge, there are no actions, suits,
agreements or proceedings before any judicial or quasi-judicial body, pending,
or to Seller’s knowledge, threatened, against or affecting all or any portion of
the Subject Property which would impair Seller’s ability to close the
transaction contemplated hereby in accordance with the terms hereof. 

     (j) Seller is not in violation of any laws relating to
terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order
No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive
Order”), and the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law
107-56. Seller or, to the knowledge of Seller, one of its agents acting or
benefiting in any capacity in connection with the transaction is any of the
following: 

	               	i.	      	Person or entity that is listed
      in the annex to, or is otherwise subject to the provisions of, the
      Executive Order;
		 
		ii.		Person or entity owner or
      controlled by, or acting for or on behalf of, any Person or entity that is
      listed in the annex to, or is otherwise subject to the provisions of, the
      Executive Order;
		 
		iii.		Person or entity with which
      Seller is prohibited from dealing or otherwise engaging in any transaction
      by any Anti-Terrorism Law;
		 
		iv.		Person or entity that commits,
      threatens or conspires to commit or supports “terrorism” as defined in the
      Executive Order; or
		 
		v.		Person or entity that is named as
      a “specially designated national and blocked person” on the most current
      list published by the U.S. Treasury Department Office of Foreign Asset
      Control at its official website or any replacement website or other
      replacement official publication of such list.

3 

     (k) The Seller or, to the knowledge of Seller, any of its
agents acting in any capacity in connection with the transaction does not (i)
conduct any business or engage in making or receiving any contribution of funds,
goods or services to or for the benefit of any person described above, (ii) deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order, or (iii) engages
in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law. 

     To the
extent any of the above representations or warranties are made to the knowledge
of Seller, such representations shall be deemed made only as to the actual
knowledge of Sigmund J. Helle without having made any investigation or inquiry
except those resulting in the creation of the materials listed on or contained
in the documents, if any, listed on Exhibit D. 

     Prior to
Closing, Seller will give Purchaser prompt written notice of any occurrence that
would change the truth of any of the foregoing representations and warranties or
any other representation or warranty of Seller herein, if then made. If there is
a material adverse change in any of the foregoing representations and warranties
prior to Closing, Purchaser will have the right to terminate this Agreement by
giving written notice to Seller within ten (10) days after it receives written
notice of such material change. If Purchaser so terminates this Agreement, the
initial $100,000 Earnest Money Deposit shall be retained by Seller and any
Additional Earnest Money Deposit (hereafter defined) shall be returned to
Purchaser and neither party shall have further rights or obligations hereunder
except for any obligations contained in this Agreement which expressly survive
termination. 

     PURCHASER
ACKNOWLEDGES THAT PURSUANT TO THIS AGREEMENT IT WILL HAVE PRIOR TO CLOSING THE
OPPORTUNITY TO PERFORM ALL SUCH TESTS, INVESTIGATIONS AND ANALYSES CONCERNING
THE SUBJECT PROPERTY AS IT DEEMS NECESSARY OR DESIRABLE. PURCHASER AGREES THAT
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY CONTAINED IN
THIS PARAGRAPH 2 AND IN THE CLOSING DOCUMENTS, IN PURCHASING THE SUBJECT
PROPERTY, PURCHASER IS NOT RELYING ON ANY REPRESENTATION, WARRANTY OR PROMISE BY
OR ON BEHALF OF SELLER CONCERNING THE PROPERTY OR ANY ASPECT THEREOF, INCLUDING,
WITHOUT LIMITATION, ANY CONCERNING THE QUALITY, VALUE, PHYSICAL ASPECTS,
PROSPECTS, COMPLIANCE WITH LAWS OR CONDITION OF THE SUBJECT PROPERTY,
ENVIRONMENTAL OR OTHERWISE, OR THE FITNESS OR SUITABILITY OF THE SUBJECT
PROPERTY FOR ANY PARTICULAR USE, AND, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES EXPRESSLY CONTAINED IN THIS PARAGRAPH 2 AND IN THE CLOSING DOCUMENTS,
PURCHASER IS PURCHASING THE SUBJECT PROPERTY BASED UPON PURCHASER’S OWN
INSPECTIONS AND EXAMINATIONS THEREOF IN ITS “AS IS” AND “WHERE IS” CONDITION,
AND “WITH ALL FAULTS.” 

4 

     3.
Representation of Purchaser. Purchaser warrants and represents as of the
date hereof as follows: 

     (a) Purchaser has full right and authority to execute and
deliver this Agreement and all documents and instruments required hereunder to
be executed and delivered by Purchaser. 

     (b) The consummation of the transactions contemplated by this
Agreement will not constitute a default or result in the breach of any term or
provision of any contract or written agreement to which Purchaser is a party so
as to adversely affect the consummation of such transactions. 

     (c) Purchaser is not in violation of any Anti-Terrorism Laws,
including the Executive Order, and the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56. 

     (d) Purchaser or, to the knowledge of Purchaser, none of its
agents acting or benefiting in any capacity in connection with the transaction
is any of the following: 

5 

	               
    	i.	      	Person or entity that is listed
      in the annex to, or is otherwise subject to the provisions of, the
      Executive Order;
		 
		ii.		Person or entity owner or
      controlled by, or acting for or on behalf of, any Person or entity that is
      listed in the annex to, or is otherwise subject to the provisions of, the
      Executive Order;
		 
		iii.		Person or entity with which
      Purchaser is prohibited from dealing or otherwise engaging in any
      transaction by any Anti-Terrorism Law;
		 
		iv.		Person or entity that commits,
      threatens or conspires to commit or supports “terrorism” as defined in the
      Executive Order; or
		 
		v.		Person or entity that is named as
      a “specially designated national and blocked person” on the most current
      list published by the U.S. Treasury Department Office of Foreign Asset
      Control at its official website or any replacement website or other
      replacement official publication of such list.

     (f) The Purchaser or, to the knowledge of Purchaser, any of
its agents acting in any capacity in connection with the transaction does not
(i) conduct any business or engage in making or receiving any contribution of
funds, goods or services to or for the benefit of any Person described above,
(ii) deal in, or otherwise engage in any transaction relating to, any property
or interests in property blocked pursuant to the Executive Order, or (iii)
engages in or conspires to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law. 

     4.
Purchase Price. Purchaser shall pay to Seller, in consideration for the purchase of the
Subject Property, the sum of Three Million Six Hundred Thousand and no/100
Dollars ($3,600,000.00) (the “Purchase Price”). The Purchase Price shall be paid
as follows: One Hundred Thousand and 00/100 Dollars ($100,000.00) upon execution
of this Agreement (hereinafter called “Earnest Money Deposit”) shall be
deposited with Seller by Purchaser. Such initial $100,000.00 Earnest Money
Deposit shall be non-refundable to Purchaser; provided, however, it shall be
subject to claims of Purchaser in the event this Agreement is terminated by
Purchaser pursuant to the provisions of Paragraph 13(A) by reason of Seller’s
breach of this Agreement. The balance of said Purchase Price plus or minus (as
the case may be) an amount which equals the cumulative result of all cash
adjustments and prorations required by this Agreement, shall be payable to
Seller on the Date of Closing by means of a wire transfer to be received on the
Date of Closing in Seller’s designated bank account. Purchaser and Seller shall
each pay one-half of the costs of establishing and maintaining the escrow of the
Additional Earnest Money Deposit, if any (described hereafter). In the event of
a Closing, all of the Earnest Money Deposit will be credited to the Purchase
Price. 

6 

     5.
Evidence of Title/Survey. Not later than the date ten (10) days after the date of this
Agreement, Seller shall furnish to Purchaser at Seller’s cost, except as
hereafter provided, a current commitment for an Owner’s current ALTA policy of
title insurance (including a special assessment search) as to the Subject
Property issued by Title Company covering the Land provided for herein, and in
an amount equal to the Purchase Price for the Subject Property, in which Title
Company also indicates its requirements to provide extended coverage over the
standard exceptions. Such commitment shall also include copies of all recorded
documents referred to in the commitment. Purchaser shall be allowed until that
date which is seventeen (17) days after receipt of the commitment examination of
title and survey and the making of any objections thereto, said objections to be
made in writing or deemed waived. For purposes of this Agreement, Permitted
Encumbrances shall not be title objections. If any objections are so made,
Seller shall be allowed five (5) days after the notice of objection to make such
title marketable. Seller shall not be required to cure title or survey
objections. Seller shall pay off and satisfy of record any monetary and
mechanic’s liens (including any medical assistance lien) and mortgages against
the Subject Property at Closing and shall take such action as is necessary to
remove from the commitment the requirement to secure and record an Affidavit
showing compliance with the required Notice to the Commissioner of Human
Services pursuant to Minn. Stat. 524-801(d) for the Estate of Herliev Helle for
the Deed of Distribution to Sigmund J. Helle filed as Document No. 7363899.

7 

     If title
and survey objections are not cured and title is not made marketable all on or
before the end of the five (5) day period above described, Purchaser shall by
written notice to Seller either: 

     (a) Terminate this Agreement, and, in such event, Purchaser
shall be entitled to a refund of all of the Additional Earnest Money Deposit
(described hereafter), if any, and neither party will have further rights or
obligations hereunder except such obligations as expressly survive termination;
or 

     (b) Waive any uncured objected to defects in title without any
reduction in the Purchase Price. 

Purchaser will make its election within
seven (7) days after expiration of Seller’s five (5) day cure period. A failure
by Purchaser to waive its objections within such seven (7) day period pursuant
to clause (b) shall be deemed an election to terminate under clause (a).

     Further,
not later than the date twenty (20) days after the date of this Agreement,
Purchaser shall secure and deliver to Seller (at Purchaser’s sole cost and
expense) a current survey of the Subject Property (herein called the “Survey”)
prepared by a surveyor licensed in the State of Minnesota and reasonably
acceptable to Purchaser, certified to Seller, Purchaser and Title Company and
Purchaser’s lender, if any, in a manner satisfactory to Purchaser, by such
surveyor as being true, accurate and having been prepared in accordance with the
current minimum detail and Table A requirements for an Urban Land Title Survey
as jointly established and adopted by the American Land Title Association and
the American Congress on Surveying and Mapping, and setting forth: (i) the legal
description of the Subject Property; (ii) the location of all improvements
thereon; (iii) all boundaries, courses and dimensions of the Land, and the
dimensions of said improvements; (iv) all easements, building lines, curb cuts,
parking, loading areas, sewage, water, electricity, gas and other utility
facilities (together with the recording information concerning the documents
creating any easements and building lines); (v) roads and means of ingress and
egress to and from the Subject Property to all public roadways; and (vi) the
gross square footage of the Subject Property. The Survey shall reveal any
encroachments onto the Subject Property from any adjacent property, any
encroachments by or from the Subject Property onto any adjacent property, and
any violation by any of the improvements on the Subject Property of any building
line or easement or restriction affecting the Subject Property. The Survey shall
also certify whether or not the Subject Property is in an area identified by an
agency or department of the Federal, State or local government as having special
flood or mudslide hazards whether or not such identification would require flood
insurance under any flood insurance laws and shall state whether the Subject
Property includes any area identified or designated by Federal, State or local
government as a wetland. Such survey shall be delivered in the form of paper
copies and on computer disk form in Auto CADD (latest format). 

8 

     6.
Delivery of Possession. Physical possession of the Subject Property shall be
delivered to Purchaser on the Date of Closing. 

     7.
Closing.
The Closing of this transaction shall take place at the office of Purchaser’s
counsel or other mutually acceptable location in Minneapolis, Minnesota, on the
date one (1) year subsequent to the date hereof (herein called the “Date of
Closing”). Purchaser may accelerate the date of Closing to a date selected by
Purchaser provided Purchaser gives Seller forty (40) days prior written notice
of such Closing Date and along with such notice Purchaser delivers to Title
Company an additional Six Hundred Thirty Thousand and no/100 Dollars
($630,000.00) as additional Earnest Money Deposit (the “Additional Earnest Money
Deposit”). Such Additional Earnest Money Deposit shall be deposited with Old
Republic National Title Insurance Company (“Title Company”) by Purchaser, and
shall be held by such Title Company in an interest bearing account. Purchaser
shall execute the W-9 form in connection therewith. Any interest earned on said
Additional Earnest Money Deposit, if any, shall become a part of the Additional
Earnest Money Deposit. Purchaser shall bear the risk of loss with respect to the
Additional Earnest Money Deposit. In the event such notice of acceleration is
given, the Purchase Price will escalate by Six Hundred Thirty Thousand and
no/100 Dollars ($630,000.00) to Four Million Two Hundred Thirty Thousand and
no/100 Dollars ($4,230,000.00). Notwithstanding the above, Seller may accelerate
the date of Closing to a date after the date forty-five (45) days after the date
of this Agreement and at least twenty (20) days subsequent to Seller’s notice of
acceleration of the date of Closing; provided, however, if Seller accelerates
the Closing there shall be no increase in the Purchase Price. 

9 

     8.
Documents to be Delivered at Closing. At Closing, Seller shall deliver to
Purchaser: 

     (i) Limited Warranty Deed conveying to Purchaser fee title to
the Subject Property, subject only to Permitted Encumbrances and such Deed shall
contain a representation by Seller that Seller does not know of any wells on the
Subject Property unless Seller provides a well disclosure certificate with
respect to any wells of which Seller has knowledge;

     (ii) “FIRPTA” affidavit in the form of Exhibit D attached
hereto and made a part hereof; 

     (iii) Seller’s Affidavit in the form
of Exhibit G attached hereto. 

     (iv) Such other documents and instruments as may reasonably be
required to carry out the terms of this Agreement. 

     (v) Taxpayer Identification and/or Federal I.D. Number
Certificate as required by Title Company. 

Purchaser shall deliver to Seller the
following instruments and documents: 

     (a) The Purchase Price in accordance
with Paragraph 4 hereof 

     (b) Such other documents and instruments as may reasonably be
required to carry out the terms of this Agreement. 

10 

At Closing, Seller and Purchaser shall
jointly deliver a closing statement to each other, and Purchaser shall provide
the certificate of real estate value, if any is required in connection with the
filing of said Limited Warranty Deed. 

     9.
Purchaser’s Entry Prior to Closing. At any time prior to the earlier of
(a) Closing or (b) the date of termination of this Agreement, Purchaser shall
have the right at reasonable times to enter upon the Subject Property solely to
examine, survey, inspect and to take soil boring tests or tests for
environmental contamination at Purchaser’s sole risk, cost and expense in order
to determine the characteristics of the Subject Property. Purchaser shall pay
all costs of such survey, inspection, soil borings and tests. Purchaser shall
notify Seller at least 48 hours prior to each entry for such purposes so that
Seller may attend such activity. Purchaser shall promptly provide to Seller
copies of all reports of its examinations, surveys, inspections and tests
without cost to Seller. Purchaser shall also be responsible for damages suffered
by Seller arising out of Purchaser’s breach of the provisions of this Paragraph
9. 

     Purchaser
hereby agrees to defend, indemnify and save Seller, its agents, employees and
contractors harmless from all liability, damage, cost and expense (including,
but not limited to, reasonable attorney’s fees) in connection with all claims,
suits, actions of every name, kind and description brought against Seller, its
agents, employees or contractors by any person or entity to the extent arising
or alleged to have arisen out of the acts or omissions of Purchaser, its agents
or employees in exercising its rights under the right of entry granted herein
unless and except to the extent the same arise out of the negligence or wrongful
act of Seller, its agents, employees and contractors. Purchaser’s obligation to
indemnify, defend and save Seller harmless shall survive Closing or termination
of this Agreement. 

11 

     10. Condition Allowing Termination by Purchaser. If any of the following conditions (which shall be for Purchaser’s benefit and may be waived by Purchaser)
occur: 

     (a) Purchaser in its sole discretion disapproves the condition
of the soil, title, survey or environmental issues relating to the Subject
Property or its potential found or determined to exist, as deemed appropriate by
Purchaser, in respect to the Subject Property whether found during its due
diligence effort or otherwise; or Purchaser determines that utilities, including
electricity, storm sewer, sanitary sewer, gas and water utilities do not exist
or are insufficient in capacity to serve Purchaser’s proposed improvements under
current zoning relating to the Subject Property; 

then, and in any such event, Purchaser
shall have the right to terminate this Agreement by written notice to Seller
given on or before the date forty-five (45) days after the date hereof, and on
such termination all payments of the Additional Earnest Money Deposit described
in Paragraph 7, if any, received by Title Company pursuant to this Agreement
together with accrued interest shall be paid by Title Company to Purchaser.

     11.
Brokerage Fees. Purchaser represents that Purchaser is represented by Northstar
Partners as Purchaser’s broker in connection with the transaction contemplated
hereby. Purchaser and Seller each represent and warrant to the other that
(except as to the fees payable by Purchaser to the party or parties identified
in the preceding sentence of this Paragraph) they have not incurred any
obligation or liability, contingent or otherwise, for brokerage or finder’s fee
or agent’s commissions or other like payment in connection with this Agreement
or the transaction contemplated hereby, and Purchaser and Seller each agree to
indemnify, defend and hold the other harmless against and in respect of any such
obligation and liability based in any way upon any other agreements,
arrangements or understandings made or claimed to have been made by the
indemnifying party with any third person. Purchaser will pay all fees payable to
Northstar Partners and its agents and co-brokers. 

12 

     12.
Costs. The
costs to be incurred in closing the transaction contemplated by this Agreement
shall be allocated to Seller and Purchaser in the event of Closing in the
following manner: 

     (a) Seller shall pay for any transfer, excise or deed tax to
be incurred in connection with the conveyance or in recording the Limited
Warranty Deed to be delivered by Seller on the Date of Closing. 

     (b) Purchaser shall pay for the recording fees incurred in
recording the Limited Warranty Deed to be delivered by Seller to Purchaser on
the Date of Closing. 

     (c) Seller shall pay all real estate taxes excluding, except
as otherwise provided, special assessments certified for payment therewith,
payable in respect to the Subject Property in the calendar year prior to the
calendar year in which Closing occurs and prior years. Further, all levied and
pending special assessments as of the date of this Agreement shall be paid in
full by Seller at or before Closing. Real estate taxes in respect to the Subject
Property (other than special assessments, which shall be paid by Seller to the
extent provided in the immediately preceding sentence) due and payable in the
calendar year in which Closing occurs shall be prorated between Seller and
Purchaser, with Purchaser paying that percentage equal to the number of days in
such year subsequent to the Tax Date divided by 365 and Seller paying the
balance. For purposes of this subparagraph (c), the Tax Date shall be deemed to
be the day immediately prior to the Date of Closing. If on the Date of Closing
the current year’s taxes are not available, the proration and allocation for
such tax parcels shall be based on the previous year’s payment and an adjustment
shall be made in cash on the date ten (10) days after the date when the current
year’s taxes and installments of special assessments are known. Special
assessments first pending after the date of this Agreement shall be paid by
Purchaser. In the event Seller has paid prior to Closing installments (including
any interest allocable thereto) of special assessments which are Purchaser’s
responsibility herein, Purchaser shall reimburse Seller for same at Closing.

     (d) Seller shall pay for the State Deed Tax and the cost of
furnishing a title commitment to Purchaser in the manner required by the
provisions of Paragraph 5 hereof, and Purchaser shall pay for the Survey and the
cost of any title insurance policy and all endorsements issued in connection
therewith. 

     (e) Purchaser and Seller shall each pay one-half (1/2) of all
costs of establishing and maintaining the escrow of the Earnest Money Deposit.

     (f) Seller and Purchaser shall each pay one-half (1/2) of any
closing fee required by Title Company to close the transaction contemplated by
this Agreement. 

     (g) Seller and Purchaser shall each pay all of the costs and
fees charged by their respective legal counsel. 

13 

13. Remedies. 

     A. In the
event Seller shall default in any material respect in the performance of any of
its obligations hereunder prior to Closing and continues in default for a period
of thirty (30) days after written notice of such default from Purchaser to
Seller, Purchaser shall have the right to terminate this Agreement, in which
event Escrow Agent shall return to Purchaser the entire Earnest Money Deposit
and all payments theretofore made to or for the benefit of Seller.
Notwithstanding anything contained in this Agreement to the contrary, such right
and remedy of Purchaser shall not deprive Purchaser of the right of commencing
legal proceedings for damages. Purchaser shall also have the option of enforcing
specific performance of this Agreement, provided this Agreement has not been
terminated as aforesaid and provided action to enforce such specific performance
is commenced within six (6) months after any such right of action arises.

     B. In the
event Purchaser shall default in any material respect in the performance of any
of its obligations hereunder other than obligations to close and continues in
default for a period of thirty (30) days after written notice of such default
from Seller to Purchaser, Seller shall have the right to terminate this
Agreement prior to the required Closing Date in accordance with applicable
Minnesota law, in which event Seller shall be entitled to retain, free of any
claim by Purchaser, the initial $100,000.00 Earnest Money Deposit as
non-refundable Earnest Money Deposit and as liquidated damages (except for
Purchaser’s obligations under Paragraphs 9 and 26 hereof) and not as a penalty.
Purchaser agrees that, in the event of such a default by Purchaser hereunder,
Seller’s damages would be difficult or impossible to determine and that an
amount equal to the initial $100,000.00 Earnest Money Deposit and such other
payments by Purchaser to Seller is a fair estimate thereof. 

14 

     C. In the
event Purchaser shall default on or after the required Closing Date in any
material respect in connection with Purchaser’s obligations hereunder to close
and continues in default for a period of thirty (30) days after written notice
of such default from Seller to Purchaser, Seller shall have the right to
terminate this Agreement on or after the required Closing Date in accordance
with applicable Minnesota law, in which event Seller shall be entitled to, and
Escrow Agent shall pay to Seller upon Seller’s demand, $1,600,000.00 as
liquidated damages (except for Purchaser’s obligations under Paragraphs 9 and
26) and not as a penalty. Purchaser agrees that, in the event of such a default
by Purchaser hereunder, Seller’s damages would be difficult or impossible to
determine and that an amount equal to $1,600,000.00 is a fair estimate thereof.
In such case, the Title Company shall be entitled to draw on the letter of
credit in order to make the required $1,500,000.00 payment ($1,600,000.00 less
the initial $100,000.00 Earnest Money Deposit) to Seller provided for herein.
Notwithstanding anything herein to the contrary, such right and remedy of Seller
shall be Seller’s sole remedy in the event of a default by Purchaser in its
obligation to close hereunder and Purchaser shall not be liable for other
damages or for specific performance except for damages under Purchaser’s
obligations under Paragraphs 9 and 26. Purchaser’s obligation to indemnify,
defend and save Seller harmless under Paragraph 9 hereof shall survive any such
termination of this Agreement. The provisions of this Agreement shall survive
termination and/or Closing in order to effectuate the provisions of this
Paragraph 13. 

     D. For
avoidance of doubt, the parties confirm that it is their intent that if this
Agreement is terminated pursuant to Section 13.B., Purchaser’s maximum liability
hereunder is $100,000.00 (plus obligations owing pursuant to Paragraphs 9 and
26, if any); if this Agreement is terminated pursuant to Section 13.C.,
Purchaser’s maximum liability is $1,600,000.00 (plus obligations owing pursuant
to Paragraphs 9 and 26, if any). 

15 

     14.
Notice. All
communications, demands, notices or objections permitted or required to be given
or served under this Agreement shall be in writing and shall be deemed to have
been duly given or served if (i) delivered in person, upon delivery, or (ii)
deposited in the United States mail, postage prepaid, for mailing by certified
or registered mail, return receipt requested, on the date of depositing the same
in the mail, (iii) by recognized overnight delivery service providing for
positive tracking of items (for example, Federal Express), on the date of
depositing the same with the delivery service, and addressed to a party to this
Agreement to the address set forth below: 

	(a)	     	If to
      Purchaser:  	     	SurModics,
      Inc.  
	  		  		9924 West 74th
      Street  
	  		  		Eden Prairie, MN
      55344  
					Attn: Bryan
    Phillips
	  
	  		with a copy
      to:  		Faegre &
      Benson  
	  		  		2200 Wells Fargo
      Center  
					90 South 7th
    Street
	  		  		Minneapolis, MN
      55402  
					Attn: Charlie
    Ferrell
	  
	(b)		If to
      Purchaser:  		Vest Mykyng
      LLC  
					6138 Arctic
Way
					Edina, MN
55436
	  
	with a
      copy to  		James L. Tucker,
      Esq.  
			Gray, Plant,
    Mooty,
	  		  		  Mooty &
      Bennett, P.A.  
	  		  		500 IDS
      Center  
	  		  		80 South Eighth
      Street  
	  		  		Minneapolis, MN
      55402-3796  
	  
	(c)		If to Title
      Company:  		Old Republic
      National Title Insurance Company  
	  		  		400 Second
      Avenue South  
	  		  		Minneapolis, MN
      55401-2499  
	  		  		Attn: Rick
      Zilka  

16 

Any party hereto may, by at least ten
(10) days notice to the other parties hereto as provided above, designate such other address for the giving of notices as deemed
necessary. 

     15.
Continued Enforceability of
Provisions. Any covenants contained herein
that are not completed or satisfied prior to the Date of Closing shall continue
in full force and effect in accordance with their terms subsequent to the Date
of Closing and shall not merge in the Closing documents. All representations and
warranties shall survive Closing and shall not merge in the Closing documents.
Any conditions to Closing shall be deemed waived at Closing unless otherwise
agreed in writing contemporaneous with Closing. 

     16.
Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties and no other agreements prior to this Agreement or
contemporaneous herewith (except written contemporaneous agreements) shall be
effective except as expressly set forth or incorporated herein. Neither Seller
nor Purchaser shall be bound by, or be liable for, any other warranties or other
representations made by any person, partnership, corporation or other entity
unless such other warranties or representations are set forth in a written
instrument duly executed by such respective party subsequent to the date hereof.
Any purported amendment hereto shall not be effective unless it shall be set
forth in writing and executed by the parties hereto, or their respective
successors or assigns. 

     17.
Binding Effect; Assignment; Waiver. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective permitted
successors and assigns; provided, however, neither Purchaser nor Seller shall be
released from its liability hereunder and the applicable assignee shall
expressly assume in writing the obligations of its assignor thereunder in a form
reasonably acceptable to the other party. Notwithstanding the foregoing,
Purchaser may assign this Agreement prior to or contemporaneous with Closing or
designate any third party to take title at Closing; provided, however, no such
assignment or designation shall release Purchaser from liability hereunder. No
waiver of any provision of this Agreement shall be effective unless it is in
writing, signed by the party against whom it is asserted and any such written
waiver shall only be applicable to the specific instance to which it relates and
shall not be deemed to be a continuing or future waiver. Purchaser may designate
a nominee to take title to the Subject Property and to receive all assignments
and transfers to be provided by Seller to Purchaser herein. 

17 

     18. Rules of Interpretation. 

     (a) This Agreement shall be interpreted and governed by the
laws of the State of Minnesota. 

     (b) The headings of paragraphs and sections contained herein
are for convenience only and in no way define, limit or describe the scope or
intent of this Agreement. 

     (c) Time shall be of the essence of this contract. 

     (d) Words of any gender used in this Agreement shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. 

     19. Exhibits. The following
exhibits are attached hereto and made a part hereof: 

	                    	Exhibit
      A:  	     	Legal
      Description  
		Exhibit
      B:  		Permitted
      Encumbrances  
		Exhibit
      C:  		FIRPTA
      Affidavit  
		Exhibit
      D:  		Seller’s Disclosures  
		Exhibit
      E:  		Seller’s Documents 
    
		Schedule
      1:  		Form Letter of
      Credit  
		Exhibit
      F:  		Memorandum of
      Purchase Agreement  
		Exhibit
      G:  		Seller’s Affidavit 
    

18 

     20.
Liability of Title Company. The sole duties of Title Company under this
Agreement shall be those described herein, and Title Company shall be under no
obligation to determine whether the other parties hereto are complying with any
requirements of law or the terms and conditions of any other agreements among
said parties. Title Company may conclusively rely upon and shall be protected in
acting upon any notice, consent, order or other document believed by it to be
genuine and to have been signed or presented by the proper party or parties.
Title Company shall have no duty or liability to verify any such notice,
consent, order or other document, and its sole responsibility shall be to act as
expressly set forth in this Agreement. Title Company shall be under no
obligation to institute or defend any action, suit or proceeding in connection
with this Agreement unless first indemnified to its satisfaction. Title Company
may consult with respect to any question arising under this Agreement and shall
not be liable for any action taken or omitted in good faith upon advice of such
counsel. 

     Title
Company shall hold any monies paid to it pursuant to this Agreement in escrow
and shall endeavor to invest such monies in certificates of deposit or interest
bearing accounts with a national banking association fully insured by the FDIC
as reasonably determined by Title Company. 

     Nothing in this Paragraph 20 relates
to any obligation of Title Company under any title commitment or policy. 

     21.
Relationship. Nothing contained in this Agreement shall constitute or be construed to
be or create a partnership, joint venture or any other relationship between
Seller and Purchaser other than the relationship of a buyer and seller of real
or personal property as set forth in this Agreement. 

19 

     22.
Exhibits/Modifications. All exhibits attached hereto contain additional terms of
this Agreement. Typewritten or handwritten provisions inserted in this form or
attached hereto shall control all printed provisions in conflict therewith.

     23.
Condemnation or Eminent Domain. In the event of any condemnation or
eminent domain proceedings for any public or quasi-public purposes at any time
prior to Closing resulting in the taking or proposed taking of any part or all
of the Subject Property, Purchaser shall close the transaction contemplated by
this Agreement subject to any such taking, in which event the purchase price
shall not be abated, provided, however, at Closing, Seller shall assign to
Purchaser and Purchaser shall be entitled to the entire award paid or payable in
respect to such taking. 

     24.
Captions and Paragraph Headings. The captions and paragraph headings
contained in this Agreement are for convenience and reference only and in no way
define, describe, extend or limit the scope or intent of this Agreement, nor the
intent of any provisions hereof. 

     25.
Attorneys’ Fees. If either Seller or Purchaser files any action or brings any proceeding
against the other arising out of this Agreement, or is made a party to any
action or proceeding brought by a third party arising out of this Agreement
without fault of the defending party, then as between Seller and Purchaser, the
prevailing party in any such action or proceeding shall be entitled to recover,
as an element of its costs of suit and not as damages, reasonable attorneys’
fees to be fixed by the court. 

     26.
Delivery of Information. Seller hereby agrees to deliver to Purchaser (unless already
delivered), within five (5) business days following the mutual execution of this
Agreement, copies of all those geotechnical reports, environmental reports, and
surveys related to the Subject Property in Seller’s possession or control,
including without limitation, those documents set forth on Exhibit E, which
Seller can find upon reasonably diligent search. Purchaser agrees to provide
within five (5) days after Purchaser’s receipt copies of all reports prepared by
or for Purchaser in connection with the transaction contemplated hereby,
including, but not limited to, surveys, geotechnical reports, environmental
reports, property condition reports. The provisions of this Paragraph 26 shall
survive Closing or termination of this agreement and shall not be subject to the
“liquidated damages” provisions herein. 

20 

     27.
Authority.
The parties executing this agreement on behalf of Purchaser and Seller,
respectively, represent and warrant that they have secured all required
approvals and consents to execute this Agreement so that upon execution it is
the valid and binding agreement of Purchaser and Seller, respectively.

     28.
Condition. This Agreement shall be void if not executed by Seller and
delivered to Purchaser on or before August 27,
2007. 

     29.
Tax Deferred Exchange. Purchaser acknowledges that Seller may desire to utilize a
tax-deferred exchange to sell the Property to Purchaser. Purchaser shall not be
required to participate in any such exchange unless (a) Seller is not released
from any of its obligations herein, (b) Purchaser is not required to assume any
additional risks, costs, or obligations by reason thereof, (c) such exchange
will not delay the closing in any manner, (d) Seller shall pay all of
Purchaser’s increased costs (including reasonable attorney’s fees for review of
documentation) arising out of such exchange or proposed exchange, and (e)
Purchaser shall not be required to take title to any property other than the
Subject Property. 

     Seller acknowledges that Purchaser
may desire to utilize a tax-deferred exchange to
purchase the Property from Seller. Seller shall not be required to participate
in any such exchange unless (a) Purchaser is not released from any of its
obligations herein, (b) Seller is not required to assume any additional risks,
costs, or obligations by reason thereof, (c) such exchange will not delay the
closing in any manner, (d) Purchaser shall pay all of Seller’s increased costs
(including reasonable attorney’s fees for review of documentation) arising out
of such exchange or proposed exchange, and (e) Seller shall not be required to
take title to any property other than the Subject Property. 

21 

     30. Additional Earnest Money Deposit/Letter of Credit. 

          (1) In the event that Purchaser has not terminated this
Agreement on or before the date forty-five (45) days after the date of this
Agreement pursuant to the provisions of Paragraph 10 hereof, Purchaser shall
deliver to Title Company, on or before such date, as further Additional Earnest
Money Deposit an unconditional, irrevocable standby letter of credit (“Letter of
Credit”). This Letter of Credit and any replacements thereof shall conform in
form and substance to the attached Schedule 1 (or shall be otherwise acceptable
to Seller) and shall: 

     (a) be issued by Wells Fargo Bank Minnesota, N.A. or any other
national bank with principal offices located in the state of Minnesota,
reasonably acceptable to Seller; 

     (b) name Title Company as
beneficiary thereunder; 

     (c) have a term ending not less than fourteen (14) months
after the date of issuance; 

     (d) automatically renew for one-year periods unless issuer
notifies beneficiary in writing, at least sixty (60) days prior to the
expiration date, that issuer elects not to renew the Letter of Credit;

     (e) provide for payment to beneficiary of $1,600,000.00 in
immediately available funds, denominated in United States dollars, upon
presentation of a Sight Draft substantially conforming to the form attached as
Exhibit A to the Letter of Credit; 

     (f) provide that draws may be presented, and are payable, at a
specified office of the issuer in Minneapolis, Minnesota; 

22 

     (g) be payable against Sight Drafts which only require the
beneficiary to state that a Draw Event (as that term is defined below) has
occurred, specifying the specific nature of the Draw Event, and stating that the
draw is payable to the order of beneficiary as a result; 

     (h) permit partial and multiple
draws; 

     (i) permit multiple transfers by beneficiary, provided that
any transferee shall be a subsequent holder of beneficiary’s obligations under
this Agreement and/or any escrow agreements in connection therewith; 

     (j) waive any rights issuer may have, at law or otherwise, to
subrogate to any claims beneficiary may have against applicant; and 

     (k) is governed by the International Standby Practices 1998,
published by the International Chamber of Commerce. 

     The
Letter of Credit (as the same is transferred, extended, renewed or replaced)
must be maintained until the Letter of Credit has been returned to Purchaser, if
at all, pursuant to the terms of this Agreement or until such time as the amount
available under the Letter of Credit has been reduced to zero by draws made
thereon and no amount remains available thereunder pursuant to the provisions
hereof. The Letter of Credit shall be returned to Purchaser at Closing and
satisfaction of all Purchaser’s obligations under this Agreement. 

     In the
event Purchaser fails to provide the initial Letter of Credit as required herein
on or before the date forty-five (45) days after the date hereof, such failure
shall be deemed an election by Purchaser to terminate this Agreement under
Paragraph 10 and the Additional Earnest Money Deposit, if any, shall be
transferred by Title Company to Purchaser and neither party shall have any
further obligation to the other except pursuant to Paragraph 9 and Paragraph 26
hereof 

     (2) Title Company may freely
transfer the Letter of Credit to a subsequent holder of Title Company’s
obligations under this Agreement accruing subsequent to the applicable transfer
without (i) Purchaser’s consent, (ii) restriction on the number of transfers, or
(iii) condition, other than presentment to issuer of the original Letter of
Credit and a duly executed transfer document conforming to the form attached as
Exhibit B to the Letter of Credit. Purchaser is solely responsible for any bank
fees or charges imposed by issuer in connection with the issuance of the Letter
of Credit or any transfer, renewal, extension, or replacement thereof. If
Purchaser fails to timely pay such transfer fees, Seller or Title Company may,
at their option and without notice to Purchaser, elect to pay any transfer fees
to issuer when due, and upon payment, such amount will become immediately due
and payable from Purchaser to the party advancing such payment together with
interest at eight percent (8%) per annum.

23 

     (3) Definition
of Draw Event. “Draw Event” means the occurrence of any of the
following
events:

     (a) Purchaser’s breach of any of its
obligations to close the transaction contemplated hereby and such failure
continues for a period of ten (10) days after notice of such failure has been
given by Seller to Purchaser as certified by Seller to Title Company in writing;
or

     (b) Purchaser fails to timely cause
the Letter of Credit to be renewed or replaced, as required in subparagraph (6)
below; or

     (c) Termination of this Agreement by
Seller pursuant to Paragraph 13(C) hereof.

     (4)
Draw and Draw Proceeds. Immediately upon the occurrence and during the
continuance of a Draw Event, Title Company may draw on the Letter of Credit and
continue to hold the proceeds as a part of Additional Earnest Money Deposit;
provided that Title Company shall provide Purchaser and Seller with written
notice of Title Company’s draw not later than three (3) business days following
such draw. The term “Draw Proceeds” means the cash proceeds of any draw or draws
made by Title Company under the Letter of Credit. Any delays by Title Company in
drawing on the Letter of Credit or using the Draw Proceeds will not constitute a
waiver by Seller or Title Company of any of their respective rights hereunder
with respect to the Letter of Credit or the Draw Proceeds. The Draw Proceeds
shall be subject to the provisions relating to disposition of the Additional
Earnest Money Deposit and the “liquidated damages” provisions as set forth in
this Agreement.

24

     (5)
Renewal and Replacement. The Letter of Credit
must provide that it will be automatically renewed unless issuer provides
written notice of non-renewal to Seller and Title Company at least sixty (60)
days prior to the expiration of the Letter of Credit. If written notice of
non-renewal is received from issuer, Purchaser must renew the Letter of Credit
or replace it with a new Letter of Credit at least thirty (30) days and no more
than sixty (60) days prior to the date of expiration date of the then current
Letter of Credit. Any renewal or replacement Letter of Credit must meet the
criteria set forth in Paragraph (1) above, and must have a term commencing no
later than the stated expiration date of the immediately prior Letter of Credit.
Failure to provide a renewal or replacement Letter of Credit as provided above
will, at Seller’s election be deemed an uncured and uncureable default under
this Agreement.

     (6) Additional
Agreements of Purchaser. Purchaser expressly acknowledges and
agrees
that:

     (a) the Letter of Credit constitutes a separate and
independent contract between Title Company and issuer, and Purchaser has no
right to submit a draw to issuer under the Letter of Credit;

     (b) Purchaser is not a third party beneficiary of such
contract, and Title Company’s ability to either draw under the Letter of Credit
or the full or any partial amount thereof or to apply Draw Proceeds may not, in
any way, be conditioned, restricted, limited, altered, impaired or discharged by
virtue of any laws to the contrary, including, but not limited to, any laws that
restrict, limit, alter, impair, discharge or otherwise affect any liability that
Purchaser may have under this Agreement or any claim that Seller has or may have
against Purchaser;

     (c) Neither the Letter of Credit nor any Draw Proceeds will be
or become the property of Purchaser, and Purchaser does not and will not have
any property right or interest therein;

     (d) Purchaser is not
entitled to any interest on any Draw Proceeds;

25

     (e) Neither the Letter of Credit nor any Draw Proceeds
constitute an advance payment of the Purchase Price unless and until applied by
Title Company to the Purchase Price in connection with Closing;

     (f) Neither the Letter of Credit nor any Draw Proceeds
constitute a measure of Seller’s damages resulting from any Draw Event, event of
default, or other breach, failure, or default (past, present, or future) under
this Agreement; and

     (g) Purchaser will cooperate with Seller and Title Company, at
Purchaser’s own expense, in promptly executing and delivering to Title Company
all modifications, amendments, renewals, extensions and replacements of the
Letter of Credit, as Title Company may reasonably request to carry out the terms
and provisions of this subparagraph 6.

     (7)
Purchaser’s Actions. If Purchaser, or any person
or entity on Purchaser’s behalf or at Purchaser’s discretion or direction,
brings any proceeding or action to contest, enjoin, interfere with, restrict or
limit, in any way whatsoever, any one or more draw requests or payments under
the Letter of Credit, and if Purchaser does not prevail in such action,
Purchaser will be liable for any and all direct damages resulting therefrom or
arising in connection therewith, including, without limitation, reasonable
attorney’s fees and costs.

     (8)
Provided that the transaction contemplated hereby is closed in accordance with
its terms with or without use of any Draw Proceeds, or in the event this
Agreement is terminated by reason of Seller’s default, Title Company shall
return the Letter of Credit to the issuer for cancellation and any unused Draw
Proceeds to Purchaser.

     31.
Purchaser agrees, which agreement shall survive Closing and delivery of the
deed, that in the event Purchaser sells or conveys an interest or makes an
agreement to sell or convey an interest or grants an option to purchase an
interest in the Subject Property to a third party on or before the date three
(3) years after the date of Closing, Purchaser agrees to pay to Seller an amount
equal to the amount that the gross net selling price (after deducting from the
gross selling price all direct expenses of sale, such as expenses of brokers,
title insurance, survey and soil testing costs) or other consideration received
by Purchaser for the Subject Property exceeds the Purchase Price paid by
Purchaser to Seller under this Agreement. Such payment, if any, shall be payable
upon closing of the sale or transfer of the Subject Property or a portion
thereof. If Purchaser shall have made improvements to the Subject Property, an
amount equal to the lower of (a) the fair market value of such improvements or
(b) the actual cost of such improvements shall be excluded in determining the
price or consideration received by Purchaser. Notwithstanding anything to the
contrary, the provisions of this Section 31 shall not apply to: (i) any sale or
transfer by Purchaser to an entity under the control of Purchaser or an entity
under common control with Purchaser, or (ii) sale of all or substantially all of
Purchaser’s assets. For clarity, this Section 31 does not apply to transfers of
stock or other equity interests in Purchaser.

26

     32.
Quit Claim Deed. In the event of termination of
this Agreement for any reason, within ten (10) days after Seller’s request,
Purchaser will deliver to Seller in form and substance acceptable to Seller, a
quit claim deed to the Subject Property in recordable form. In the event
Purchaser fails to so deliver such quit claim deed, Purchaser will indemnify,
defend and hold harmless Purchaser from all loss, claim, damage and expense
arising out of Purchaser’s failure to deliver such quit claim deed.

     33.
Confidentiality. Except as set forth in the Memorandum of Purchase
Agreement as set forth in Section 34 below, Purchaser agrees to hold in
confidence until Closing or termination of this Agreement, the terms and
contents of this Agreement and not to disclose such matters to any third party
without the prior written consent of Seller except after the date forty-five
(45) days after the date of this Agreement with regard to Purchaser’s mandatory
reporting obligations, if any, as a public company and except as reasonably
necessary on an absolute “need-to-know” basis to coordinate with any contractors
or the City of Eden Prairie or other governmental body for Purchaser’s due
diligence and planning for use and improvements of the Subject Property.
Notwithstanding the above, prior to the date forty-five (45) days after the date
of this Agreement, Purchase may make a Form 8-K disclosure to the Securities and
Exchange Commission as follows:

27

On August ____, 2007, SurModics, Inc. (the “Company’) entered into a
Purchase Agreement (the “Agreement’) with Vest Mykyng LLC (the “Seller’),
pursuant to which, subject to the terms and conditions of the Agreement, the
Company will purchase a parcel of land from the Seller. The Agreement is a
“Material Contract” as defined under Item 601(b)(10)(ii)(C) of Regulation S-K
under the Securities Exchange Act of 1934 because the Agreement is a contract
calling for the acquisition of property for consideration exceeding 15% of the
book value of the property, plant and equipment of the Company on a consolidated
basis. However, the consummation of the transactions contemplated by the
Agreement will not be deemed to involve a “significant amount of assets” under
Instruction 4 to Item 2.01 of Form 8-K because the amount to be paid for the
land will not exceed 10% of the total assets of the Company on a consolidated
basis. The transactions contemplated by the Agreement are expected to close
between 45 days and one year after the date of the
Agreement.

     34.
Memorandum of Purchase Agreement. Purchaser and
Seller shall sign, upon execution hereof, the Memorandum of Purchase Agreement
in the form attached hereto as Exhibit F, to be held by Title Company pursuant
to the provisions hereof, which shall at Purchaser’s request to Title Company,
and at Purchaser’s expense be recorded by Title Company at the Office of the
County Recorder or Registrar of Titles, as applicable, in Hennepin County,
Minnesota. Such Memorandum of Purchase Agreement may only be recorded after the
date which is the later of (a) the date forty-five (45) days after the date
hereof, or (b) the date Purchaser delivers to Title Company the initial Letter
of Credit set forth in Paragraph 30 hereof. Within five (5) days after
termination of this Agreement or Closing, Purchaser shall cause an instrument to
be recorded to release such Memorandum of Purchase Agreement of record. In the
event Purchaser fails to do so, Purchaser shall indemnify and defend Seller from
all loss, claim, damage, or expense arising out of Purchaser’s failure to do so.
The provisions of this Paragraph 34 shall survive Closing and/or termination of
this Agreement.

28

     35.
Mortgaging of Subject Property. Purchaser shall
have the right to subject the Subject Property or any portion thereof to a
mortgage in the amount of $1,500,000.00 or less. Said mortgage must be pursuant
to an arm’s length mortgage transaction with a bona fide third-party lender.
Purchaser agrees that it will subordinate its rights under this Agreement to the
mortgagee’s interest in the Subject Property under the mortgage and collateral
mortgage documents. Such mortgagee shall be required to provide to Purchaser
notice of foreclosure at the time of publication of any notice of
foreclosure.

(Signature page
follows.)

29

     IN WITNESS
WHEREOF, the parties hereto have set their hands as of the day and year first
above written.

	Dated:  24 August,
      2007  	SELLER:  
		 
	 	Vest Mykyng
      LLC  
	 	By:  	/s/ [Illegible]  
	 	Its:  	PRESIDENT  
	 
	Dated:  Aug 24,
      2007  	PURCHASER:  
		 
	 	SurModics,
      Inc.  
	 	By:  	/s/ Bruce J Barclay  
	 	Its:  	President & CEO  

30

CONSENT

     The
undersigned, Old Republic National Title Insurance Company, hereby consents to
the terms and conditions relating to escrow of the Additional Earnest Money
Deposit, if any, and the Letter of Credit described in the foregoing Purchase
Agreement.

	OLD REPUBLIC
      NATIONAL TITLE  
	INSURANCE
      COMPANY  
	 
      
	 
      
	   
	By: 
      	/s/ [Illegible]  
	Its:  	Assistant Vice President 
      
	 
	Dated: August
      24, 2007  

31

EXHIBIT
A

Legal
Description

Lot 2, Block 1,
Norseman Industrial Park Sixth Addition, according to the recorded plat thereof,
Hennepin County, Minnesota.

EXHIBIT
B

	1.	     	
      Building, zoning and subdivision
      ordinances, state and federal regulations.

	 
	2.		
      Real estate taxes not yet due and
      payable.

	 
	3.		
      All exceptions to title shown on
      the Commitment or Survey waived or not objected to by
    Purchaser.

	 
	4.		
      If Purchaser fails to obtain the
      Survey in accordance with the requirements herein, matters which would be
      shown on an accurate survey of the Subject Property.

	 

EXHIBIT
C

NON-FOREIGN
TRANSFEROR’S CERTIFICATION 
(Entity Transferor)

     Section
1445 of the Internal Revenue Code provides that a transferee of a U.S. real
property interest must withhold tax if the transferor is a foreign person. For
U.S. tax purposes (including section 1445), the owner of a disregarded entity
(which has legal title to a U.S. real property interest under local law) will be
the transferor of the property and not the disregarded entity. To inform the
transferee that withholding of tax is not required upon the disposition of a
U.S. real property interest by [name of transferor], the undersigned
hereby. certifies the following on behalf of [name of
transferor]:

     1.
[Name of transferor] is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);

     2. [Name of
transferor]’s U. S. employer identification number is
______________________________________________;

     3. [Name
of transferor]’s office address is
_______________________________________________________________

____________________________________________________; and

     4.
[Name of transferor] is not a “disregarded entity” as defined in IRS
Regulation 1.1445-2 (b)(iii).

     [Name
of transferor] understands that this certification may be disclosed to the
Internal Revenue Service by transferee and that any false statement contained
herein could be punished by fine, imprisonment or both.

     Under
penalties of perjury, I declare that I have examined this certification and to
the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this document on behalf of
[name of transferor].

	Date:
      ___________, 20__  	  	 
	 	Signature  	
	 	
	 	  	
	 	Title  	

EXHIBIT
D

DISCLOSURES AND DISCLOSURE
DOCUMENTS

	1.	     	
      Seller discloses that dumping of
      debris and materials on the Subject Property has occurred from time to
      time which was unauthorized by Seller.

	 
	2.		
      Seller discloses matters set
      forth and/or referred to in letter from Darwin Schulz, Hennepin County
      Department of Environmental Services dated May 10, 2007.

	 

SCHEDULE
1

FORM OF LETTER OF
CREDIT

[LETTERHEAD OF ISSUING
BANK]

	IRREVOCABLE STANDBY LETTER  
      	DATE OF ISSUANCE: 	  	 
	OF CREDIT NO:   	  	 	EXPIRATION DATE: 	  	 
	 	
	BENEFICIARY:  
      	APPLICANT:  
    
	 	
	(TITLE COMPANY)  	  	 	(PURCHASER)   	  	 
	  	 	  	 
	  	 	  	 
	  	 	  	 

AS THE ISSUING BANK
(“ISSUER”), WE HEREBY ESTABLISH THIS IRREVOCABLE STANDBY LETTER OF CREDIT
NO. ______________ IN FAVOR OF THE ABOVE-NAMED BENEFICIARY (“BENEFICIARY”) FOR THE ACCOUNT
OF THE ABOVE-NAMED APPLICANT (“APPLICANT”) IN THE AMOUNT OF USD $ _____________ U.S.
DOLLARS).

BENEFICIARY MAY DRAW
ALL OR ANY PORTION OF THIS LETTER OF CREDIT AND ISSUER WILL MAKE FUNDS
IMMEDIATELY AVAILABLE TO BENEFICIARY UPON PRESENTATION OF BENEFICIARY’S DRAFT(S)
AT SIGHT IN SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT “A” (“SIGHT
DRAFT”), DRAWN ON ISSUER AND ACCOMPANIED BY THIS LETTER OF CREDIT. ALL SIGHT
DRAFT(S) MUST BE SIGNED AND ENDORSED ON BEHALF OF BENEFICIARY, INDICATE THE
SIGNATOR’S TITLE OR OTHER OFFICIAL CAPACITY, AND BE ACCOMPANIED BY BENEFICIARY’S
AFFIDAVIT ATTESTING TO THE FACT THAT A DRAW EVENT HAS OCCURRED AND SPECIFYING
THE NATURE OF THAT EVENT. THE ISSUER WILL EFFECT PAYMENT UNDER THIS LETTER OF
CREDIT NOT LATER THAN THE CLOSE OF BUSINESS ON THE NEXT BUSINESS DAY FOLLOWING
PRESENTMENT OF THE SIGHT DRAFT(S).

ISSUER WILL HONOR ANY
SIGHT DRAFT(S) PRESENTED IN SUBSTANTIAL COMPLIANCE WITH THE TERMS OF THIS LETTER
OF CREDIT AT ISSUER’S OFFICE LOCATED IN MINNEAPOLIS, MINNESOTA, ON OR BEFORE THE
ABOVE STATED EXPIRATION DATE, AS SUCH EXPIRATION DATE MAY BE EXTENDED HEREUNDER.
PARTIAL AND MULTIPLE DRAWS ARE PERMITTED ON ANY NUMBER OF OCCASIONS. FOLLOWING
ANY PARTIAL DRAW, ISSUER WILL ENDORSE THIS LETTER OF CREDIT AND RETURN THE
ORIGINAL TO BENEFICIARY..

ISSUER ACKNOWLEDGES
THAT THIS LETTER OF CREDIT IS ISSUED PURSUANT TO THE PROVISIONS OF THAT CERTAIN
PURCHASE AGREEMENT BETWEEN SIGMUND J. HELLE AND SURMODICS, INC. FOR LAND LOCATED
IN EDEN PRAIRIE, MINNESOTA (“PURCHASE AGREEMENT”). NOTWITHSTANDING ANY REFERENCE
IN THIS LETTER OF CREDIT TO THE PURCHASE AGREEMENT OR ANY OTHER DOCUMENTS,
INSTRUMENTS OR AGREEMENTS, OR REFERENCES IN THE PURCHASE AGREEMENT OR ANY OTHER
DOCUMENTS, INSTRUMENTS OR AGREEMENTS TO THIS LETTER OF CREDIT, THIS LETTER OF
CREDIT CONTAINS THE ENTIRE AGREEMENT BETWEEN BENEFICIARY AND ISSUER RELATING TO
THE OBLIGATIONS OF ISSUER HEREUNDER.

THIS LETTER OF CREDIT
WILL BE AUTOMATICALLY EXTENDED EACH YEAR WITHOUT AMENDMENT FOR A PERIOD OF ONE
YEAR FROM THE EXPIRATION DATE HEREOF, AS EXTENDED, UNLESS AT LEAST SIXTY (60)
DAYS PRIOR TO THE EXPIRATION DATE, ISSUER NOTIFIES BENEFICIARY BY REGISTERED
MAIL THAT IT ELECTS NOT TO EXTEND THIS LETTER OF CREDIT FOR SUCH ADDITIONAL
PERIOD. NOTICE OF NON-EXTENSION WILL BE GIVEN BY ISSUER TO BENEFICIARY AT
BENEFICIARY’S ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS AS BENEFICIARY
MAY DESIGNATE TO ISSUER IN WRITING AT ISSUER’S LETTERHEAD
ADDRESS.

THIS LETTER OF CREDIT
IS FREELY TRANSFERABLE IN WHOLE OR IN PART, AND THE NUMBER OF TRANSFERS IS
UNLIMITED. ISSUER AGREES THAT IT WILL EFFECT ANY TRANSFERS IMMEDIATELY UPON
PRESENTATION TO ISSUER OF THIS LETTER OF CREDIT AND A WRITTEN TRANSFER REQUEST
SUBSTANTIALLY IN THE FORM OF THE COMPLETED TRANSFER FORM ATTACHED HERETO AS
EXHIBIT “B.” SUCH TRANSFER WILL BE EFFECTED AT NO COST TO BENEFICIARY. ANY
TRANSFER FEES ASSESSED BY ISSUER WILL BE PAYABLE SOLELY BY APPLICANT, AND THE
PAYMENT OF ANY TRANSFER FEES WILL NOT BE A CONDITION TO THE VALIDITY OR
EFFECTIVENESS OF THE TRANSFER OR THIS LETTER OF CREDIT.

ISSUER WAIVES ANY
RIGHTS IT MAY HAVE, AT LAW OR OTHERWISE, TO SUBROGATE TO ANY CLAIMS BENEFICIARY
MAY HAVE AGAINST APPLICANT OR APPLICANT MAY HAVE AGAINST
BENEFICIARY.

EXCEPT AS OTHERWISE
EXPRESSLY MODIFIED HEREIN, THIS STANDBY LETTER OF CREDIT IS SUBJECT TO THE
INTERNATIONAL STANDBY PRACTICES 1998, PUBLISHED BY THE INTERNATIONAL CHAMBER OF
COMMERCE.

	ISSUER: 	 
	By: 	   
	 	AUTHORIZED
      SIGNATURE 
	Its: 	   

2

EXHIBIT
“A”

TO LETTER OF
CREDIT

SIGHT
DRAFT

Sight
Draft

$_____________________ 

     At sight,
pay to the order of [Name of Beneficiary to be inserted], the amount of USD
$______________ (__________________ and 00/100ths U.S. Dollars).

     Drawn
under [Name of Issuer to be inserted] Standby Letter of Credit No._________________.

	Dated: _________________, 20__  
	  
	[Name of
      Beneficiary to be inserted]  
	  
	By:  	   
	         Its
      Authorized Representative and [Title or Other Official  
	         Capacity to
      be inserted]  

To: [Name and Address of Issuer to be
inserted]

3

EXHIBIT
“B”

TO LETTER OF
CREDIT

FORM OF TRANSFER
REQUEST

IRREVOCABLE STANDBY LETTER OF

CREDIT NO: _____________________

	CURRENT
      BENEFICIARY:                       
      APPLICANT: 
	 
    	 	 
    	 
	 		 	
	 		 	
	 		 	

TO: [NAME OF ISSUING
BANK]

The undersigned, as
the current “Beneficiary” of the above referenced Letter of Credit, hereby
requests that you reissue the Letter of Credit in favor of the transferee named
below [INSERT TRANSFEREE NAME AND ADDRESS BELOW]:

	   
      
	 
	 
	 

From and after the
date this transfer request is delivered to the Issuer, the transferee shall be
the “Beneficiary” under the Letter of Credit for all purposes and shall be
entitled to exercise and enjoy all of the rights, privileges and benefits
thereof.

	DATED:   	[NAME OF BENEFICIARY] 
	   
	   	By 	 
    
	   	Name 	 
    
	   	Title 	 
    
	 	 
	 	 
	 	
      [NOTARY
      ACKNOWLEDGMENT] 

[TO BE SIGNED BY A
PERSON PURPORTING TO BE AN AUTHORIZED REPRESENTATIVE OF THE BENEFICIARY AND INDICATING THEIR TITLE
OR OTHER OFFICIAL CAPACITY, AND ACKNOWLEDGED BY A NOTARY
PUBLIC.]

4

EXHIBIT
E

SELLER’S
DOCUMENTS

	1.		
      Certificate of
      Survey/Topography by Ron Kreuger and Associates dated January
      1989.

	 
	2.		
      Soil Test Report
      by Braun Engineering dated 23/5/89.

	 
	3.		
      Letter from
      Darwin Schulz, Hennepin County Department of Environmental Services dated
      May 10, 2007.

	 
	4.		
      ALTA survey of
      Lot 1 dated 9/14/98.

	 
	5.	     	
      City Engineering
      documents relating to road and utilities last revised 9/27/84, Sheets 1,
      3, 4 and 5.

	 

5

EXHIBIT
F

MEMORANDUM OF
PURCHASE AGREEMENT

     THIS
MEMORANDUM OF PURCHASE AGREEMENT, made this __ day of ___________________, 2007,
by SurModics, Inc., a Minnesota corporation (“Purchaser”), and Vest Mykyng LLC,
a Minnesota limited liability company (“Seller”).

RECITALS

     Seller
and Purchaser are parties to a Purchase Agreement dated as of
______________________, 2007 (the “Purchase Agreement”) providing for sale to
Purchaser of the real estate in Hennepin County, Minnesota, described on
Exhibit A hereto (the “Property”), and desire to provide recordable
evidence thereof.

         NOW, THEREFORE, the parties hereto hereby agree as
follows:

     1.
Subject to and on the terms, conditions, and provisions of the Purchase
Agreement, Seller has agreed and hereby agrees to sell, and Purchaser has agreed
and hereby agrees to buy, the Property.

     2. This
Memorandum may be executed in counterparts each of which shall be considered an
original.

     3. This
Memorandum is solely to give notice of the existence of such Purchase
Agreement.

     IN
WITNESS WHEREOF, the parties hereto have caused these presents to be made as of
the day and year first above stated.

Signature page
follows.

SIGNATURE PAGE
TO
MEMORANDUM
OF PURCHASE AGREEMENT

	SELLER:   
	Vest Mykyng LLC  

	  
	By:   	 
    
	Its:   	 
    

	STATE OF MINNESOTA    	)  
		) ss.   
	COUNTY OF HENNEPIN 	) 

     The foregoing instrument was
acknowledged before me this __ day of ____________________, 2007, by
____________________________ the ______________________ of Vest Mykyng LLC, a
Minnesota limited liability company, on behalf of the limited liability
company.

	  
	Notary Public  
  

SIGNATURE PAGE
TO
MEMORANDUM
OF PURCHASE AGREEMENT

	PURCHASER:  
	 
	SurModics, Inc.  
	 
	By: 	 
	Its: 	 

	STATE OF MINNESOTA    	)  
		) ss.   
	COUNTY OF HENNEPIN 	) 

     The
foregoing instrument was acknowledged before me this __ day of
____________________, 2007, by ____________________________, the
______________________ of SurModics, Inc., a Minnesota corporation, on behalf of
the corporation.

	  
	Notary Public  
  

THIS INSTRUMENT WAS
DRAFTED BY:

Faegre & Benson
LLP (AW) 
2200 Wells Fargo Center 
90 South Seventh Street

Minneapolis, MN 55402 
Phone: (612) 766-7000

EXHIBIT
A

Lot 2, Block 1,
Norseman Industrial Park Sixth Addition, according to the recorded plat thereof,
Hennepin County, Minnesota

EXHIBIT
G

	STATE OF
      MINNESOTA 	) 	
		)ss.	
	COUNTY OF
      HENNEPIN  	) 	Affidavit
      Regarding Seller(s)

	 		____________________________ , being first duly sworn, on oath
      say(s) that:
	   
	1.		
      (They are) (__he is) the
      ________________ and ____________________ of Vest Mykyng LLC, a Minnesota
      limited liability company, the company named as _____________________ in
      the document dated August ____, 2007, and filed for record
      _________________________, 2007, as Document No. _________________, (or in
      Book ____________________, of ___________________, Page _____________), in
      the Office of the County Recorder of Hennepin County,
    Minnesota.

	  
	2.		
      Said entity’s principal place of
      business is at 6138 Arctic Way, Edina, Minnesota 55436, and said company’s
      previous principal place(s) of business during the past ten years
      (has)(have) been at:

	  
	3.		There have been
      no:
	  
	 		a.		
      Bankruptcy, divorce or
      dissolution proceedings involving said person during the time said person
      has had any interest in the premises described in the above document
      (“Premises”);

	  
	 		b.		
      Unsatisfied judgments of record
      against said persons nor any actions pending in any courts, which affect
      the Premises;

	  
	 		c.	    	Tax liens against said
      person(s);
	 		except as herein
      stated:
	  
	4.		
      Any bankruptcy or dissolution
      proceedings of record against entities with the same or similar names,
      during the time period in which the above named entity had any interest in
      the Premises, are not against the above named entity.

	  
	5.		
      Any judgments, or tax liens of
      record against entities with the same or similar names are not against the
      above named entity except as recorded.

	  
	6.		
      There has been no labor or
      materials furnished to the Premises for which payment has not been
      made.

	  
	7.	    	
      There are no persons in
      possession of any portion of the Premises other than pursuant to a
      recorded document except as stated herein:

     Affiants
know the matters herein stated are true and make(s) this Affidavit for the
purpose of inducing the passing of title to the Premises.

	 
	 

Subscribed and sworn
to before me this 
_____ day of ____________, 2007

 

______________________________
Notary Public

	
   NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR
      RANK)	THIS INSTRUMENT WAS DRAFTED BY
(NAME AND ADDRESS):
Gray,
      Plant, Mooty, Mooty & Bennett, P.A.
500 IDS Center
80 South Eighth
      Street
Minneapolis, MN
      55402
(JLT)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]