Document:

exv10w46

EXHIBIT 10.46

CHANGE OF CONTROL AGREEMENT

     This Change of Control Agreement (this “Agreement”) is entered into effective as of May 7,
2008, between Michael K. Green (“Employee”) and Artes Medical, Inc., a Delaware corporation (the
“Company”).

RECITALS

     A. The Board of Directors (the “Board”) believes it is in the best interests of the Company
and its stockholders to provide incentives to Employee to continue in the service of the Company
and aid in any future Change of Control (as defined below) event.

     B. The Company and Employee are parties to an Offer Letter Agreement dated April 30, 2008 (the
“Existing Agreement”).

     C. Employee has been granted stock options issued under the Company’s 2001 Stock Option Plan
(the “2001 Plan”) and/or the 2006 Equity Incentive Plan (the “2006 Plan”) as set forth on
Schedule A attached hereto (collectively, the “Options”).

AGREEMENT

     Now therefore, in consideration of the mutual promises, covenants and agreements contained
herein, and in consideration of the continuing employment of Employee by the Company, the parties
hereto agree as follows:

ARTICLE 1

CHANGE OF CONTROL AND INVOLUNTARY TERMINATION

     1.1 Accelerated Vesting of Options. Notwithstanding anything to the contrary in the Existing
Agreement, the Options or the 2001 and 2006 Plans,

          (a) fifty percent (50%) of Employee’s then unvested option shares under the Options shall
automatically vest upon the closing date of a Change of Control, if (i) Employee provides services
to the Company as an employee or a consultant continuously through the closing date of such Change
of Control or (ii) Employee’s employment with the Company ends by reason of an Involuntary
Termination (as defined below) within three (3) months prior to the closing date of such Change of
Control; and

          (b) the remaining fifty percent (50%) of the then unvested option shares under the Options
shall automatically vest should Employee’s employment be terminated by reason of an Involuntary
Termination on or within twenty-four (24) months following the closing date of such Change of
Control.

     1.2 Involuntary Termination Severance. Should Employee’s employment with the Company or the
Surviving Company be terminated by reason of an Involuntary Termination
within three (3) months prior to the closing date of a Change of Control or within twenty-four
(24) months following the closing date of such Change of Control and contingent upon the

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Employee’s execution of the Release (attached hereto as Attachment A) and the Release becoming
effective under its terms, the Company shall

          (a) pay Employee severance (“Involuntary Termination Severance”) equal to: (i) nine (9) months
of Employee’s Base Salary (as defined below) plus (ii) any earned, but not yet paid, pending bonus
from a completed calendar year plus (iii) the product of (A) the average amount of the bonus, if
any, Employee received from the Company in connection with Employee’s services to the Company
during the last three fiscal years prior to the effective date of the Involuntary Termination and
(B) the number of days between the last day of the fiscal year preceding the Involuntary
Termination and the effective date of the Involuntary Termination divided by 365 days. The Company
shall pay the Involuntary Termination Severance to Employee in one lump sum within fifteen (15)
days of the effective date of the Involuntary Termination, and shall deduct from the Involuntary
Termination Severance all applicable payroll deductions and all required withholdings; and

          (b) provided Employee timely makes an election to continue coverage under the Company’s or the
Surviving Company’s group health plan pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA”), the Company or the Surviving Company will pay Employee’s COBRA premiums for
a maximum period of nine (9) months following the effective date of Employee’s Involuntary
Termination (the “COBRA Continuation Period”). In addition, if Employee’s spouse and/or dependents
were enrolled in the Company’s or the Surviving Company’s group health plan on the effective date
of Employee’s Involuntary Termination, the Company will pay the COBRA premiums for Employee’s
eligible dependents during the same nine (9) month period, but only to the same extent that such
dependents’ premiums under such plan were paid by the Company or the Surviving Company prior to the
effective date of Employee’s Involuntary Termination. No provision of this Agreement will affect
the continuation coverage rules under COBRA, except that the Company’s or the Surviving Company’s
payment of any applicable premiums during the COBRA Continuation Period will be credited as payment
by Employee for purposes of the Employee’s payment required under COBRA. At the conclusion of the
COBRA Continuation Period, Employee will be responsible for the entire payment of premiums required
under COBRA for the remaining duration of eligibility for COBRA, if any. Nothing in this Section
1.2(b) shall restrict the ability of the Company or its successor from changing the provider and/or
some or all of the terms of such health insurance plan, provided that all similarly situated
participants are treated the same and provided, further, that Employee and Employee’s eligible
dependents receive approximately the same benefits they were eligible to receive prior to the
change in provider and/or some or all of the terms of such health insurance plan.

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ARTICLE 2

RESIGNATION FOR GOOD REASON AND TERMINATION FOR OTHER THAN

CAUSE

     2.1 In the absence of a Change of Control, or more than 24 months after a Change of Control,
should Employee at any time be terminated for other than Cause, or elect a Good Reason Resignation
(as defined herein), Employee shall be entitled to the following:

          (a) Base Salary and Bonus. Contingent upon the Employee’s execution of the Release and the
Release becoming effective under its terms, the Company shall pay Employee severance equal to: (i)
nine (9) months of Employee’s Base Salary (as defined below) plus (ii) any earned, but not yet
paid, pending bonus from a completed calendar year which shall be calculated based upon the target
bonus percentage in the Existing Agreement plus (iii) the product of (A) the average amount of the
bonus, if any, Employee received from the Company in connection with Employee’s services to the
Company during the last three fiscal years prior to the effective date of the termination or
resignation and (B) the number of days between the last day of the fiscal year preceding the
termination or resignation and the effective date of the termination or resignation divided by 365
days. The Company shall pay the severance set forth in this Section 2.1(b) to Employee in one lump
sum within fifteen (15) days of the effective date of the Release executed in connection with the
termination without Cause or Good Reason Resignation, and shall deduct from the severance all
applicable payroll deductions and all required withholdings.

          (b) COBRA Premiums. Provided Employee timely makes an election to continue coverage under the
Company’s or the Surviving Company’s group health plan pursuant to COBRA, the Company or the
Surviving Company will pay Employee’s COBRA premiums for a maximum period of nine (9) months
following the effective date of the Release executed in connection with Employee’s termination
without Cause or Good Reason Resignation (the “COBRA Continuation Period”). In addition, if
Employee’s spouse and/or dependents were enrolled in the Company’s or the Surviving Company’s group
health plan on the effective date of Employee’s termination without Cause or Good Reason
Resignation, the Company will pay the COBRA premiums for Employee’s eligible dependents during the
same nine (9) month period, but only to the same extent that such dependents’ premiums under such
plan were paid by the Company or the Surviving Company prior to the effective date of Employee’s
termination without Cause or Good Reason Resignation. No provision of this Agreement will affect
the continuation coverage rules under COBRA, except that the Company’s or the Surviving Company’s
payment of any applicable premiums during the COBRA Continuation Period will be credited as payment
by Employee for purposes of the Employee’s payment required under COBRA. At the conclusion of the
COBRA Continuation Period, Employee will be responsible for the entire payment of premiums required
under COBRA for the remaining duration of eligibility for COBRA, if any. Nothing in this Section
2.1(c) shall restrict the ability of the Company or its successor from changing the provider and/or
some or all of the terms of such health insurance plan, provided that all similarly situated
participants are treated the same and provided, further, that Employee and Employee’s eligible
dependents receive approximately the same benefits they were eligible to receive prior to the
change in provider and/or some or all of the terms of such health insurance plan.

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ARTICLE 3

DEFINITIONS

     For purposes of this Agreement, the following terms are defined as follows:

     3.1 “Base Salary” means the Employee’s base salary (exclusive of bonuses, awards under the
Company’s 2001 and 2006 Plans and other forms of supplemental or equity —based compensation) at
the rate in effect during the last regularly scheduled payroll period immediately preceding the
date of the event in question, computed before any deferrals or pre-tax or post-tax payroll
deductions.

     3.2 “Cause” shall mean the occurrence of any one or more of the following: (a) Employee’s
conviction of, or plea of no contest with respect to, any felony involving fraud or dishonesty; (b)
Employee’s participation in a fraud or act of dishonesty against the Company that results in
material harm to the business of the Company; (c) Employee’s material breach of any contract or
agreement or direct order between Employee and the Company or any statutory duty Employee owes to
the Company; (d) Employee’s willful failure or refusal to comply with a lawful instruction of the
Board; or (e) Employee’s habitual neglect of duties or incompetence that results in material harm
to the business of the Company; provided, however, that with respect to a termination based on
clauses (c) and/or (e) above, the action or conduct continues after the Company has provided
Employee with written notice thereof and 15 days to cure the same.

     3.3 “Good Reason Resignation” means Employee’s resignation of employment with the Company or
any Surviving Company in the absence of a Change of Control within sixty (60) days following: (i) a
reduction in Employee’s level of compensation (including Base Salary and fringe benefits) by more
than twenty percent (20%) in the aggregate (other than in connection with a general decrease in the
salary applicable to all executives of the Company or all executives of any Surviving Company),
(ii) a relocation by the Company or any Surviving Company of Employee’s work site to a facility or
location more than fifty (50) miles from Employee’s principal work site for the Company at the time
of the Good Reason Resignation , or (iii) a material reduction in Employee’s duties or
responsibilities without Employee’s consent

     3.4 “Change of Control” means (a) a merger or consolidation in which the Company is not the
surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock holdings), (b) a
merger in which the Company is the surviving corporation but after which the stockholders of the
Company immediately prior to such merger (other than any stockholder that merges, or which owns or
controls another corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (c) the sale of all or substantially all of the
assets of the Company, or (d) the acquisition, sale, or transfer of more than 50% of the
outstanding shares of the Company by tender offer or similar transaction.

     3.5 “Disabled” means disability as defined in Section 22(e) of the Internal Revenue Code of
1986, as amended.

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     3.6 “Effective Date” means the earliest date the Release attached hereto becomes enforceable
against Employee pursuant to its terms.

     3.7 “Involuntary Termination” means within three (3) months prior to or within twenty-four
(24) months following a Change of Control: (a) the Company or the Surviving Company terminate
Employee’s employment without Cause by the Company or the Surviving Company or (b) Employee resigns
from the Company or the Surviving Company within sixty (60) days following: (i) a reduction in
Employee’s level of compensation (including Base Salary and fringe benefits) by more than twenty
percent (20%) in the aggregate (other than in connection with a general decrease in the salary
applicable to all executives of the Company or all executives of the Surviving Company), (ii) a
relocation by the Company or the Surviving Company of Employee’s work site to a facility or
location more than fifty (50) miles from Employee’s principal work site for the Company at the time
of the Change of Control, or (iii) a material reduction in Employee’s duties or responsibilities
without Employee’s consent.

     3.8 “Options,” as defined above, shall also include each and all future stock option grants,
if any, issued by the Company to Employee pursuant to the 2006 Plan, and Schedule A
attached hereto shall be automatically amended, without further action by the Employee or the
Company, on the date of the issuance of each such additional Option(s) to include such Option(s) on
Schedule A, unless the terms of the Option(s) expressly state(s) that such Option(s) shall
not be subject to the terms and conditions of this Agreement. The Company will promptly furnish to
Employee a copy of the amendment(s) to Schedule A, if any, referred to in the preceding
sentence.

     3.9 “Surviving Company” means any company into which the Company is merged or consolidated in
connection with a Change of Control.

ARTICLE 4

GENERAL PROVISIONS

     4.1 Employment Status. This Agreement does not constitute a contract of employment or impose
on Employee any obligation to remain as an employee, or impose on the Company any obligation (a) to
retain Employee as an employee, (b) to change the status of Employee as an at-will employee, (c) to
change the Company’s policies regarding termination of employment; or (d) to be unable to terminate
Employee’s employment with the Company at any time, with or without notice, for any reason or no
reason.

     4.2 Covenants of Employee. Employee agrees that Employee will provide reasonable assistance
with respect to the negotiation and consummation of any Change of Control, including all due
diligence procedures undertaken in connection therewith or the winding-up of the Company’s affairs.

     4.3 Termination. The terms of this Agreement shall terminate upon the earlier of (a) the date
of Employee’s voluntary termination of employment with the Company or any Surviving Company for any
reason other than an Involuntary Termination or a Good Reason Resignation, (b) the date of
termination of Employee’s employment with the Company or any Surviving Company for Cause, (c) the
date of termination of Employee’s employment with the

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Company or any Surviving Company because Employee dies or becomes Disabled, and (d) the date
that all obligations of the parties hereunder have been satisfied.

     4.4 Notices. Any notices provided hereunder must be in writing and such notices or any other
written communication shall be deemed effective upon the earlier of personal delivery (including
delivery by facsimile) or the third day after mailing by first class mail, to the Company at its
primary office location and to Employee at Employee’s address as listed in the Company’s payroll
records. Any payments made by the Company to Employee under the terms of this Agreement shall be
delivered to Employee either in person or at the address as listed in the Company’s payroll
records.

     4.5 Severability. If a legal authority of competent jurisdiction determines that any term or
provision of this Agreement is invalid or unenforceable, in whole or in part, then the remaining
terms and provisions hereof shall be unimpaired. Such legal authority will have the authority to
modify or replace the invalid or unenforceable term or provision with a valid and enforceable term
or provision that most accurately embodies the parties’ intention with respect to the invalid or
unenforceable term or provision.

     4.6 Complete Agreement. This Agreement, including Attachment A and any other written
agreements referred to in this Agreement, constitutes the entire agreement between Employee and the
Company with regard to the subject matter hereof, and supersedes and replaces any contrary terms of
the Existing Agreement, which contrary terms of the Existing Agreement shall have no further force
or effect.

     4.7 Amendment or Termination of Agreement. This Agreement may be changed or terminated only
upon the mutual written consent of the Company and Employee. The written consent of the Company to
a change or termination of this Agreement must be signed by an officer of the Company after such
change or termination has been approved by the Board.

     4.8 Counterparts. This Agreement may be executed in separate counterparts, any one of which
need not contain signatures of more than one party, but all of which taken together will constitute
one and the same Agreement.

     4.9 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of
and be enforceable by Employee and the Company, and their respective successors, assigns, heirs,
executors and administrators, except that Employee may not assign any duties hereunder and may not
assign any rights hereunder without the prior written consent of the Company. If a Change in
Control of the Company occurs and the Company does not survive the transaction as an entity, the
Company will require the Surviving Company to assume the Company’s obligations hereunder.

     4.10 Attorneys’ Fees. If either party hereto brings any action to enforce his, her or its
rights hereunder, the prevailing party in any such action shall be entitled to recover his, her or
its reasonable attorneys’ fees and costs incurred in connection with such action.

     4.11 Advice of Counsel. Employee represents and warrants that Employee has had the
opportunity to (and was encouraged to) obtain the advice of independent counsel with respect to the
review, preparation and execution of this Agreement. Employee further acknowledges that

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Heller Ehrman LLP represented solely the interests of the Company with respect to preparation
of this Agreement.

     4.12 Choice of Law. All questions concerning the construction, validity and interpretation of
this Agreement will be governed by the laws of the State of California, without regard to such
state’s conflict of laws rules.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year written above.

	 	 	 	 	 
	 	ARTES MEDICAL, INC.

 	 
	 	By:  	/s/ Diane S. Goostree
 	 
	 	 	Name:  	Diane S. Goostree 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EMPLOYEE

 	 
	 	/s/ Michael K. Green
 	 
	 	Michael K. Green 	 
	 	 	 

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SCHEDULE A

OPTION SUMMARY

[to be completed upon grant of stock options by Board of Directors]

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ATTACHMENT A

GENERAL RELEASE AND

COVENANT NOT TO SUE

     Certain capitalized terms used in this Release are defined in the Retention Agreement (the
“Agreement”) which each party hereto has executed and of which this General Release and Covenant
Not to Sue (the “Release”) is a part.

     Employee, on his or her own behalf and on behalf of his or her descendants, dependents, heirs,
executors and administrators and permitted assigns, past and present, in consideration for the
Company’s performance of its obligations under the Agreement, does hereby covenant not to sue or
pursue any litigation (or file any charge or otherwise correspond with any Federal, state or local
administrative agency) against, and waives, releases and discharges the Company, and its respective
assigns, affiliates, subsidiaries, parents, predecessors and successors, and the past and present
stockholders, employees, officers, directors, representatives and agents or any of them
(collectively, the “Company Group”), from any and all claims, demands, rights, judgments, defenses,
actions, charges or causes of action whatsoever (collectively, “Claims”), of any and every kind and
description, whether known or unknown, accrued or not accrued, that Employee ever had, now has or
shall or may have or assert as of the date of this Release against any of them, including, without
limiting the generality of the foregoing, any Claims related to employment or termination of
employment or that arise out of or relate in any way to the Age Discrimination in Employment Act of
1967 (“ADEA”), as amended, the Older Workers Benefit Protection Act, Title VII of the Civil Rights
Act of 1964, as amended, and other Federal, state and local laws relating to discrimination on the
basis of age, sex or other protected class, all claims under Federal, state or local laws for
express or implied breach of contract, wrongful discharge, defamation, intentional infliction of
emotional distress, and any related claims for attorneys’ fees and costs; provided,
however, that nothing herein shall release any member of the Company Group from (i) any of
its obligations under the Retention Agreement or (ii) any rights of the Employee to indemnification
by any member of the Company Group pursuant to the Company’s charter, bylaws or insurance policies
or any applicable statutes (including, but not limited to, California Labor Code 2802) as a result
of his or her service as an officer or director of the Company. The Employee further agrees that
this Release may be pleaded as a full defense to any action, suit or other proceeding covered by
the terms hereof which is or may be initiated, prosecuted or maintained by the Employee, his or her
heirs or assigns. Notwithstanding the foregoing, the Employee understands and confirms that he is
executing this Release voluntarily and knowingly, and this Release shall not affect the Employee’s
right to claim otherwise under ADEA. In addition, the Employee shall not be precluded by this
Release from filing a charge with any relevant Federal, State or local administrative agency, but
the Employee agrees not to participate in, and agrees to waive his rights with respect to any
monetary or other financial relief arising from any such administrative proceeding.

     The Company, on its own behalf and on behalf of its assigns, affiliates, subsidiaries,
parents, predecessors and successors, and its past and present shareholders, employees, officers,
directors, representatives and agents or any of them, does hereby covenant not to sue or pursue any
litigation (or file any charge or otherwise correspond with any Federal, state or local

Page 10 of 12

 

administrative agency) against, and waives, releases and discharges Employee and his heirs,
successors and assigns, descendants, dependents, executors and administrators, past and present,
and any of his affiliates and each of them (collectively, the “Employee Group”) from any
and all Claims, of any and every kind and description, whether known or unknown, accrued or not
accrued, that the Company or any of its subsidiaries ever had, now has or shall or may have or
assert as of the date of this Release against any of them, based on facts known to any executive
officer of the Company as of the date of this Release (other than the Employee), including
specifically, but not exclusively and without limiting the generality of the foregoing, any and all
claims, demands, agreements, obligations and causes of action arising out of or in any way
connected with any transaction, occurrence, act or omission related to Employee’s employment by the
Company or any of its subsidiaries or the termination of that employment; provided,
however, that nothing herein shall release the Employee Group from any obligations arising
out of or related in any way to Employee’s obligations under the Agreement, any agreement governing
the terms of any stock options granted to the Employee or impair the right or ability of the
Company to enforce the terms thereof and any proprietary information and inventions agreement
between the Company and Employee.

     In furtherance of their respective agreements set forth above, each of the Employee and the
Company hereby expressly waives and relinquishes any and all rights under any applicable statute,
doctrine or principle of law restricting the right of any person to release claims which such
person does not know or suspect to exist at the time of executing a release, which claims, if
known, may have materially affected such person’s decision to give such a release. In connection
with such waiver and relinquishment, each of the Employee and the Company acknowledges that it is
aware that it may hereafter discover claims presently unknown or unsuspected, or facts in addition
to or different from those which it now knows or believes to be true, with respect to the matters
released herein. Nevertheless, it is the intention of each of the Employee and the Company to
fully, finally and forever release all such matters, and all claims relative thereto which now
exist, may exist or theretofore have existed, as specifically provided herein. The parties hereto
acknowledge and agree that this waiver shall be an essential and material term of the release
contained above. In addition, and not by way of limitation to the foregoing, each of the Employee
and the Company fully understands and knowingly and expressly waives its rights and benefits under
Section 1542 of the California Civil Code or under any similar provision of law. Section 1542 of
the California Civil Code states that:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known
by him must have materially affected his settlement with the debtor.”

Nothing in this paragraph is intended to expand the scope of the release as specified herein.

     This Release shall be governed by and construed in accordance with the laws of the State of
California, applicable to agreements made and to be performed entirely within such State.

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     To the extent that the Employee is forty (40) years of age or older, this paragraph shall
apply. The Employee acknowledges that he has been offered a period of time of at least twenty-one
(21) days to consider whether to sign this Release, and the Company agrees that the Employee may
cancel this Release at any time during the seven (7) days following the date on which this Release
has been signed by all parties to this Release. In order to cancel or revoke this Release, the
Employee must deliver to the General Counsel of the Company written notice stating that the
Employee is canceling or revoking this Release. If this Release is timely cancelled or revoked,
none of the provisions of this Release shall be effective or enforceable and the Company shall not
be obligated to make the payments to the Employee or to provide the Employee with the other
benefits described in the Agreement and all contracts and provisions modified, relinquished or
rescinded hereunder shall be reinstated to the extent in effect immediately prior hereto.

     Each of the Employee and the Company acknowledge that they have entered into this Release
knowingly and willingly and has had ample opportunity to consider the terms and provisions of this
Release.

	 	 	 	 	 	 	 
	 	 	ARTES MEDICAL, INC.

	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	Name:	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	Title:	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	Date:	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EMPLOYEE

	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 	 	 	 	 	 	 

12exv10w47

EXHIBIT 10.47

SEPARATION AGREEMENT AND GENERAL RELEASE

     This Separation Agreement and General Release (this “Agreement”) is made and entered into by
and between Peter C. Wulff (“Mr. Wulff”) and Artes Medical, Inc., a Delaware corporation (the
“Company”), and inures to the benefit of each of the Company’s current, former and future parents,
subsidiaries, related entities, employee benefit plans and each of their respective fiduciaries,
predecessors, successors, officers, directors, stockholders, agents, attorneys, employees and
assigns.

RECITALS

     A. Mr. Wulff has resigned (i) as an employee of the Company and from his position as Chief
Financial Officer and Executive Vice President and as a Section 16 officer of the Company; and (ii)
as Managing Director of the Company’s subsidiary, Artes Medical Germany GmbH (“AMG”), both
resignations to be effective as of May 6, 2008 (“Resignation Date”).

     B. Mr. Wulff wishes to confirm his resignation from the Company and from AMG pursuant to the
terms and to enter into a Mutual General Release with the Company, on the terms and conditions set
forth herein.

     C. Mr. Wulff and the Company wish permanently to resolve any and all disputes that may have
arisen between them to date, including but not limited to, any disputes arising out of the
cessation of Mr. Wulff’s service to the Company as an officer and employee.

AGREEMENT

     THEREFORE, in consideration of the mutual promises and covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by and between Mr. Wulff, on the one hand, and the Company, on
the other, as follows:

     1. Resignation. Mr. Wulff hereby irrevocably resigns as (a) an employee of the
Company and (b) Chief Financial Officer, Executive Vice President and a Section 16 officer of the
Company, and (c) as Managing Director of AMG, each to be effective as of the Resignation Date
following approval of this Agreement by the Board of Directors of the Company.

     2. Press Release. Subject to the disclosure requirements applicable to the Company
under the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”),
the Company agrees to prepare and issue a press release regarding Mr. Wulff’s services to the
Company and his resignation as Chief Financial Officer and as an employee of the Company that is
acceptable to the Company and Mr. Wulff. The form of the press release is attached hereto as
Exhibit A. Mr. Wulff acknowledges and agrees that the Company will file a Form 8-K with
the SEC regarding his resignation from the Company.

     3. Wages, Vacation Time, Expenses. Mr. Wulff and the Company agree that he had
accrued and unused vacation time of 239.06 hours as of the Resignation Date. The Company agrees to
pay Mr. Wulff for this accrued and unused vacation time on the next business day immediately following the
Effective Date of this Agreement (less federal and state withholding

 

 

and other applicable taxes). Mr. Wulff has been reimbursed by the Company for all reimbursable
business expenses incurred by him through the Resignation Date.

     4. Termination Consideration. Contingent upon this Agreement becoming effective as
provided in Section 27 of this Agreement (the “Effective Date”), the Company agrees:

          4.1 The Company will pay Mr. Wulff, as W-2 income, the equivalent of fifteen (15) months
salary, totaling Three Hundred Twelve Thousand, Five Hundred Dollars ($312,500), less all
applicable withholding and other applicable taxes, payable as follows:

               (a) One Hundred Seventy Five Thousand Dollars ($175,000), less all applicable withholding and
other applicable taxes, on the next business day immediately following the Effective Date of this
Agreement; and

               (b) Twenty-two Thousand Nine Hundred Sixteen Dollars and Sixty-six Cents ($22,916.66), less
all applicable withholding and other applicable taxes, on the next business day immediately
following the Effective Date of this Agreement and continuing on each of the next five consecutive
months payable on the first day of each month with the final payment on October 1 2008, for an
aggregate amount of One Hundred Thirty Seven Thousand Five Hundred Dollars ($137,500) (less all
applicable withholding and other applicable taxes). The amounts which remain payable under this
section 4.1(b) on and after the first payment is made hereunder shall be maintained in an escrow
account at one of the Company’s existing banking institutions.

          4.2 Mr. Wulff will be entitled to additional vesting of his stock options as set forth on
Exhibit B subject to Board approval, expected to be received on May 6, 2008. As set forth on
Exhibit B, Mr. Wulff will have a total of 78,350 shares of common stock fully vested under his
outstanding stock options (the “Stock Options”) as of the Effective Date of this Agreement.
Subject to Board approval, Mr. Wulff shall have twenty-four (24) months after the Effective Date of
this Agreement to exercise his options. Mr. Wulff acknowledges and agrees that the extension of
the period in which he may exercise his vested option shares under his Stock Options from ninety
(90) days after the Effective Date of this Agreement to twenty four months to May 6, 2010 will have
the effect of automatically converting any of the Stock Options (other than those that are fully
vested as of the Effective Date) that are currently Incentive Stock Options (“ISO”) to
Non-Qualified Stock Options (“NSO”). The Stock Options held by Mr. Wulff and which are subject to
the extension of the exercise period described herein, are set forth on Exhibit B, attached
hereto and incorporated herein by this reference.

     Mr. Wulff further acknowledges that ISOs and NSOs are treated differently under the tax laws.
For example, upon the exercise of a Stock Option following its conversion to an NSO, Mr. Wulff will
recognize immediate taxable income in an amount equal to the excess of (a) the fair market value of
the purchased shares at the time of exercise over (b) the aggregate exercise price paid for those
shares. This income will be subject to federal and state income and employment tax withholding,
even though Mr. Wulff is not an employee of the Company at the time of exercise. As a result, when
Mr. Wulff elects to exercise any Stock Option converted to an NSO, he will be required to deliver a
check to the Company not only for the exercise price of the purchased shares but also for the
applicable withholding taxes. Mr. Wulff acknowledges that he is solely responsible for seeking his
own legal and tax advice on such matters.

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          4.3 The Company will pay or alternatively, reimburse Mr. Wulff upon reasonable proof of such
expenses, the COBRA premium(s) on Mr. Wulff’s behalf and his legal dependents for a period of
fifteen (15) months commencing on the date of Mr. Wulff’s separation of employment from the Company
(the “COBRA Period”); provided Mr. Wulff does not otherwise become eligible to participate in
another employer’s group insurance plan. If Mr. Wulff desires to continue his participation beyond
the end of the COBRA Period, and is eligible to continue his participation pursuant to COBRA, Mr.
Wulff agrees that he shall be fully responsible for making the necessary premium payments in order
to continue such coverage. Nothing herein shall be deemed to permit Mr. Wulff to continue
participating in any life insurance, long-term disability benefits, or accidental death and
dismemberment plans maintained by the Company after the date of his separation of employment from
the Company. Nothing herein shall limit the right of the Company to change the provider and/or the
terms of its group health insurance plans at any time hereafter.

          4.5 Mr. Christopher J. Reinhard, the Company’s Chairman of the Board, will provide a letter of
positive reference on behalf of Mr. Wulff within five business days immediately following the
Effective Date of this Agreement for purposes of assisting him in obtaining future employment, the
contents and format of which shall be subject to Mr. Reinhard’s sole discretion.

     5. Equity Holdings.

          5.1 Stock. Mr. Wulff hereby acknowledges that he holds 10,000 shares of Common Stock
(collectively, the “Stock”).

          5.2 Options. In addition, Mr. Wulff hereby acknowledges that he holds the Stock
Options to purchase the indicated shares of Common Stock at the indicated exercise price in the
table attached as Exhibit B.

          5.3 Acknowledgement. Mr. Wulff acknowledges and agrees that the Stock listed in
Section 5.1 and the Stock Options to acquire shares of Common Stock listed in Section 5.2 sets
forth Mr. Wulff’s and Mr. Wulff’s spouse, executors, administrators, stockholders, assigns, and
successors, entire interest in or right to acquire the capital stock of the Company (or rights or
other securities exercisable or convertible into the capital stock of the Company), and that
neither he nor his spouse, executors, administrators, stockholders, assigns and successors have any
right to acquire or purchase any additional shares of capital stock or rights or other securities
exercisable or convertible for the Company’s capital stock (collectively, the “Securities”).

     6. Covenants. At all times on and after the Effective Date, Mr. Wulff shall to the
best of his ability, upon the reasonable request of the Company:

          6.1 Reasonably assist and cooperate with the Company, and the Company’s agents, in completing
an audit of all past issuances of securities by the Company and evaluating and resolving all
potential claims related to rights to receive or ownership of the Company’s securities, which shall
include, but is not limited to, (a) providing the Company with full and timely disclosure and with
access to all available information related to the past issuances of the Company’s securities and
potential claims by third parties related to their rights to receive or ownership of the Company’s
securities (including claims by actual and potential investors,

3

 

finders, placement agents, brokers, consultants, employees and directors), (b) assist the
Company in resolving any potential claims and disputes related to same; and (c) assist in preparing
and execute, under penalty of perjury, a disclosure report for the Company’s Audit Committee, which
contains representations and warranties by Mr. Wulff, regarding the Company’s past issuances of
securities and potential claims related to the rights of third parties to receive or their
ownership of the Company’s securities.

          6.2 Reasonably assist and cooperate with the Company, and the Company’s agents, in responding
to any questions or issues related to the Company and/or its officers, directors, employees and
consultants during the time Mr. Wulff was employed by the Company raised by the U.S. Securities and
Exchange Commission, the Company’s auditors, the Company’s Board of Directors or any committee
thereof, the Company’s investment bankers, the Company’s legal counsel, or any other federal, state
or foreign regulatory body.

          6.3 Reasonably assist and cooperate fully with the Company, and the Company’s agents, in
matters the Board has determined are necessary to comply with federal, state or foreign securities
laws.

          6.4 Reasonably assist and cooperate with the Company, and the Company’s agents, in responding
to any questions or issues raised by the U.S. FDA or any similar foreign regulatory body; and not
to take any action that may potentially cause the Company or the Company’s clinical investigators,
Scientific Advisory Board members or customers to be in violation of the FDA’s rules and
regulations or the rules and regulations of any other federal, state or foreign regulatory agency
that has or may have in the future jurisdiction over the Company or its products.

          6.5 The Company will reimburse Mr. Wulff for reasonable expenses incurred by him in response
to requests by the Company for assistance and cooperation on the matters referenced in this section
6, and shall compensate Mr. Wulff for time spent on such matters at the rate of $250 per hour.

     7. General Release by Mr. Wulff. In consideration of the mutual promises and
covenants contained herein, Mr. Wulff for himself, his heirs, executors, administrators, assigns
and successors, fully and forever releases and discharges the Company and each of its current,
former and future parents, subsidiaries, related entities, employee benefit plans and each of their
respective fiduciaries, predecessors, successors, officers, directors, stockholders, attorneys,
agents, employees and assigns (collectively, the “Company Releasees”), with respect to any and all
claims, liabilities and causes of action, of every nature, kind and description, in law, equity or
otherwise, whether know or unknown, suspected or unsuspected, which have arisen, occurred or
existed at any time prior to the Effective Date of this Agreement, including, without limitation,
any and all claims, liabilities and causes of action arising out of or relating to Mr. Wulff’s
equity ownership in the Company, Mr. Wulff’s employment with the Company or the cessation of that
employment or Mr. Wulff’s service as an officer of the Company or the cessation of that service;
provided, however, that nothing herein shall release the Company Releasees from any obligations,
representations, warranties or other duties under this Agreement or impair the right or ability of
Mr. Wulff or any of the Wulff Releasees to enforce the terms thereof. Notwithstanding this
Agreement, however, nothing herein shall release the Company from any obligation to indemnify Mr.
Wulff as a former employee or officer, or relinquish any right to insurance coverage, in the

4

 

event that some other party commences any form of legal proceeding relating to his employment
with the Company or his services as an officer.

     8. General Release by the Company. In consideration of the mutual promises and
covenants contained herein, the Company and the Company Releasees fully and forever release and
discharge Mr. Wulff and his descendants, dependents, executors, administrators, attorneys and
agents (collectively, the “Wulff Releasees”), with respect to any and all claims, liabilities and
causes of action, of every nature, kind and description, in law, equity or otherwise, whether known
or unknown, suspected or unsuspected, which have arisen, occurred or existed at any time prior to
the Effective Date of this Agreement, including, without limitation, any and all claims,
liabilities and causes of action arising out of or relating to Mr. Wulff’s employment with the
Company or Mr. Wulff’s service as an officer of the Company; provided, however, that nothing herein
shall release the Wulff Releasees from any obligations, representations, warranties or other duties
under this Agreement or the Confidentiality and Proprietary Information Agreement signed by Mr.
Wulff during his employment with the Company or impair the right or ability of the Company or any
of the Company Releasees to enforce the terms thereof.

     9. Knowing Waiver of Employment Related Claims. Mr. Wulff understands and agrees that
he is waiving any and all rights he may have had, now has, or in the future may have, to pursue
against any of the Company Releasees any and all remedies available to him under any
employment-related causes of action, including without limitation, claims of wrongful discharge,
breach of contract, breach of the covenant of good faith and fair dealing, fraud, violation of
public policy, defamation, discrimination, retaliation, harassment, personal injury, physical
injury, emotional distress, claims for attorneys’ fees claims under Title VII of the Civil Rights
Act of 1964, as amended, the Age Discrimination in Employment Act, the Americans With Disabilities
Act, the Federal Rehabilitation Act, the Family and Medical Leave Act, the California Fair
Employment and Housing Act, the California Family Rights Act, the Equal Pay Act of 1963, the
provisions of the California Labor Code and any other federal, state or local laws and regulations
relating to employment or the conditions of employment. Notwithstanding the foregoing, this
release shall not apply to any claims by Mr. Wulff for workers’ compensation benefits, unemployment
insurance benefits, or any other claims that he cannot lawfully waive by this Agreement. This
release shall also not affect or diminish any contractual or statutory rights that Mr. Wulff has to
indemnification for acts or omissions within the course and scope of his employment with the
Company, nor shall it affect or diminish Mr. Wulff’s rights to coverage under any applicable
insurance policies held by the Company or its officers and directors. Further, this Agreement does
not waive or release any rights or claims that Mr. Wulff may have under the Age Discrimination in
Employment Act that arise after the execution of this Agreement.

     10. Waiver of Civil Code § 1542. The parties both agree to waive any and all rights
and benefits conferred upon each of them by Section 1542 of the Civil Code of the State of
California, which states as follows:

“A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor.”

Mr. Wulff (on his behalf and on behalf of the Wulff Releasees) expressly agrees and understands
that the release given by him pursuant to this Agreement applies to all unknown, unsuspected

5

 

and unanticipated claims, liabilities and causes of action which Mr. Wulff may have against the
Company or any of the other Company Releasees.

The Company (on its behalf and on behalf of the Company Releasees) expressly agrees and understands
that the release given by it pursuant to this Agreement applies to all unknown, unsuspected and
unanticipated claims, liabilities and causes of action which the Company may have against Mr. Wulff
or any of the other Wulff Releasees.

     11. Severability of Release Provisions. The parties agree that if any provision of
the release given by Mr. Wulff or the Company, respectively, under this Agreement is found to be
unenforceable, it will not affect the enforceability of the remaining provisions and the courts may
enforce all remaining provisions to the extent permitted by law.

     12. Promise to Refrain from Suit or Administrative Action. Mr. Wulff represents that,
as of the Effective Date of this Agreement, he has not filed any lawsuits, complaints, petitions,
claims or other accusatory pleadings against the Company or any Company Releasees in any court of
law or before any government agency. Mr. Wulff further agrees that, to the fullest extent
permitted by law, he will not prosecute in any court, whether state or federal, any claim or demand
of any type related to the matters released above, it being the intention of the parties that with
the execution of this release, the Company and all Company Releasees will be absolutely,
unconditionally and forever discharged of and from all obligations to or on behalf of Mr. Wulff
related in any way to the matters discharged herein. Mr. Wulff waives his right to recover any
type of personal relief from the Company or any Company Releasees, including monetary damages or
reinstatement, in any administrative action or proceeding brought by or before any government
agency or body, whether state or federal, and whether brought by Mr. Wulff or on Mr. Wulff’s
behalf, related in any way to the matters released herein.

     13. Confidentiality of Agreement and Nondisparagement. The parties both promise and
agree that, unless compelled by legal process, they will not disclose to others and will keep
confidential the facts and circumstances relating to Mr. Wulff’s employment with the Company, other
than as necessarily disclosed by the public filing of this Agreeement, and except Mr. Wulff may
disclose this information to his spouse and to his attorneys, accountants and other professional
advisors to whom the disclosure is necessary to accomplish the purposes for which Mr. Wulff has
consulted such professional advisors. Mr. Wulff expressly promises and agrees that, unless
compelled by legal process, he will not disclose to any present or former employees of the Company
the fact or the terms of this Agreement. Similarly, the Company promises and agrees that, unless
required under the rules and regulations of the SEC (as determined by the Company based on the
advice of its corporate counsel) or compelled by legal process, it will not disclose to others and
will keep confidential both the fact of and the terms of this Agreement, including the amounts
referred to in this Agreement, except that it may disclose this information to its attorneys,
accountants and other professional advisors to whom the disclosure is necessary to accomplish the
purposes for which the Company has consulted such professional advisors. The parties further
promise and agree never to disparage one another by making any oral or written statement which
tends to criticize or discredit the other.

     14. No Injuries. Mr. Wulff acknowledges that he has not suffered any work-related
illnesses or injuries while employed by the Company.

6

 

     15. Non-Solicitation. Mr. Wulff agrees that for a period of one year following his
Resignation Date, he will not directly or indirectly solicit, entice, induce or attempt to induce
or influence any employee, independent contractor, vendor, or supplier of the Company to terminate
or alter his, his or its relationship with the Company, or accept employment at another company,
entity, or with Mr. Wulff.

     16. Integrated Agreement. The parties acknowledge and agree that no promises or
representations were made to them concerning the subject matter of this Agreement which do not
appear written herein and that this Agreement contains the entire agreement of the parties on the
subject matter thereof. The parties further acknowledge and agree that parol evidence shall not be
required to interpret the intent of the parties.

     17. Voluntary Execution. The parties hereby acknowledge that they have read and
understand this Agreement and that they sign this Agreement voluntarily and without coercion.

     18. Waiver, Amendment and Modification of Agreement; Assignment. The parties agree
that no waiver, amendment or modification of any of the terms of this Agreement shall be effective
unless in writing and signed by all parties affected by the waiver, amendment or modification. No
waiver of any term, condition or default of any term of this Agreement shall be construed as a
waiver of any other term, condition or default. The rights and liabilities of the parties hereto
shall bind and inure to the benefit of their respective successors, heirs, executors and
administrators, as the case may be.

     19. Representation by Counsel.

          19.1 Mr. Wulff acknowledges and agrees that he has had the right and sufficient opportunity to
be represented by counsel of his own choosing. Mr. Wulff further acknowledges and agrees that he
is not relying on the Company or its outside legal counsel for legal advice regarding this
Agreement. The parties further acknowledge that they have entered into this Agreement voluntarily,
without coercion, and based upon their own judgment and not in reliance upon any representations or
promises made by the other party or parties, other than those contained within this Agreement. The
parties further agree that if any of the facts or matters upon which they now rely in making this
Agreement hereafter prove to be otherwise, this Agreement will nonetheless remain in full force and
effect.

          19.2 Contingent upon this Agreement becoming effective as provided in Section 27 of this
Agreement, the Company agrees to reimburse Mr. Wulff for the legal fees paid to his legal counsel
for services rendered on his behalf in connection with his Resignation and this Agreement, provided
that Mr. Wulff or his counsel shall provide the Company redacted copies of such legal fee invoices;
and provided that the total amount of reimbursement for such fees shall not exceed $15,000 in any
event.

     20. California Law. The parties agree that this Agreement and its terms shall be
construed under California law, without reference to rules of conflicts of law.

     21. Drafting. The parties agree that this Agreement shall be construed without regard
to the drafter of the same and shall be construed as though each party to this Agreement
participated equally in the preparation and drafting of this Agreement.

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     22. Counterparts. This Agreement may be signed in counterparts and said counterparts
shall be treated as though signed as one document.

     23. Return of Company Property. Mr. Wulff shall return to the Company all of his
access keys and electronic passes to the Company’s premises, his Company laptops and computers, and
all Company data, documents, files, records, computer-recorded information and all copies thereof,
in whatever media, in his possession on or before the Effective Date, or sooner upon demand by the
Company therefore. Mr. Wulff specifically promises and agrees that he shall not retain copies
(electronic or otherwise) of any company data, documents, files, records or information following
the Effective Date of this Agreement. Mr. Wulff represents that he has already returned all
Company property as referenced, and the Company acknowledges receipt of his laptops and computers.
The parties agree that Mr. Wulff personally owns the blackberry he used at the time of his
Resignation.

     24. Attorneys’ Fees. Subject to the provisions of Section 19.2 above, each party
shall be responsible for its own legal fees incurred in connection with the entering into of this
Agreement.

     25. Period to Consider Terms of Agreement. Mr. Wulff acknowledges that this Agreement
was first presented to him on May 2, 2008 , that the terms of this Agreement have been negotiated
by counsel for both parties, and that he is entitled to have 21 days’ time in which to consider the
Agreement. Mr. Wulff acknowledges that he understands that he should obtain the advice and counsel
from the legal representative of his choice before executing this Agreement, and that he executes
this Agreement having had sufficient time within which to consider its terms. Mr. Wulff represents
that if he executes this Agreement before 21 days have elapsed, he does so voluntarily, and that he
voluntarily waives any remaining consideration period. The parties both agree that any changes to
this Agreement negotiated between them after May 2, 2008 shall not require a new 21-day
consideration period.

     26. Revocation of Agreement. Mr. Wulff understands that after executing this
Agreement, he has the right to revoke it within seven (7) days after his execution of it. Mr.
Wulff understands that this Agreement will not become effective and enforceable unless the seven
day revocation period passes and Mr. Wulff does not revoke the Agreement in writing. Mr. Wulff
understands that this Agreement may not be revoked after the seven day revocation period has
passed. Mr. Wulff understands that any revocation of this Agreement must be made in writing and
delivered to the Company (to the attention of the Company’s Chief Legal Officer) within the seven
day period, and that if he does so revoke the Agreement, he shall not be entitled to receive any of
the benefits described herein.

     27. Effective Date. This Agreement shall become effective on the eighth (8th) day
after execution by Mr. Wulff, so long as Mr. Wulff has not revoked it within the time and in the
manner specified in Section 26 of this Agreement.

     28. Injunctive Relief; Consent to Jurisdiction. Mr. Wulff acknowledges and agrees
that damages will not be an adequate remedy in the event of a breach of any of his obligations
under this Agreement. Mr. Wulff therefore agrees that the Company shall be entitled (without
limitation of any other rights or remedies otherwise available to the Company and without the
necessity of posting a bond) to obtain an injunction from any court of competent jurisdiction
prohibiting the continuance or recurrence of any breach of this Agreement. Mr. Wulff hereby

8

 

submits to the jurisdiction and venue in the federal district court for the Southern District
of California and in the courts of the State of California in San Diego County, California. Mr.
Wulff further agrees that service upon him in any such action or proceeding may be made by first
class mail, certified or registered, to Mr. Wulff’s address as last appearing on the records of the
Company.

     29. Notice. Any notices provided hereunder must be in writing and such notices or any
other written communication shall be deemed effective: (i) upon personal delivery to the party to
be notified; (ii) when sent by confirmed telex or facsimile if sent during normal business hours of
the recipient or, if not sent during normal business hours, then on the next business day; (iii)
three days after having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (iv) one day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. If notice is to be provided to
the Company, Mr. Wulff shall use the Company’s primary office location; and if notice is to be
provided to Mr. Wulff, the Company shall use Mr. Wulff’s address as listed in the Company’s payroll
records. Any payments made by the Company to Mr. Wulff under the terms of this Agreement shall be
delivered to Mr. Wulff either in person or at the address as listed in the Company’s payroll
records.

     30. Arbitration. Any dispute or claim arising out of or in connection with this
Agreement will be finally settled by binding arbitration in San Diego, California in accordance
with the then-current employment rules of the American Arbitration Association by one (1)
arbitrator appointed in accordance with said rules. The arbitrator shall apply California law,
without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution
of any dispute. Judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of
competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in
accordance with this paragraph, without breach of this arbitration provision. If litigation,
arbitration or any other legal proceeding is instituted arising out of or in any way related to
this Agreement, the prevailing party shall be entitled to attorneys fees, expert fees, statutory
costs, and other actual costs.

     31. Survival. Sections 1.1, 5.3, 6 and 7 though 30 shall survive termination or
expiration of this Agreement.

9

 

THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH
AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE VOLUNTARILY EXECUTED
THIS AGREEMENT ON THE DATES SHOWN BELOW.

	 	 	 	 	 
	COMPANY: 	ARTES MEDICAL, INC.

 	 
	 	By:  	/s/ Diane S. Goostree
 	 
	 	 	Diane S. Goostree 	 
	 	 	Chief Executive Officer 	 
	 

Dated: 5/04/08

	 	 	 	 	 
	MR. WULFF: 	PETER C. WULFF

 	 
	 	By:  	/s/ Peter C. Wulff
 	 
	 	 	Peter C. Wulff 	 
	 

Dated: 5/04/08

[SIGNATURE PAGE TO SEPARATION AGREEMENT AND GENERAL RELEASE]

10

 

Exhibit A

(Form of Press Release)

11

 

Exhibit B

(Stock Options)

1

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