EXHIBIT 10.38
MASTER SERVICE AGREEMENT
This Master Service Agreement, (this “Master Agreement”) effective June 4, 2007
(the “Effective Date”), is made by and between Therapeutics Inc., a Delaware
corporation with corporate offices located at 9025 Balboa Avenue, Suite 100, San
Diego, CA 92123 (hereinafter “THERAPEUTICS” or “TI”) and Artes Medical, Inc.
with corporate offices located at 5870 Pacific Center Boulevard, San Diego, CA
92121 (hereinafter “ARTES”).
WHEREAS, ARTES and THERAPEUTICS desire to enter into this Master Agreement to
provide the terms and conditions upon which ARTES may engage THERAPEUTICS from
time-to-time for the purpose of managing the preclinical and clinical
development of its new products in the field of dermatology, and other related
services or projects, by executing individual Work Orders (as defined below)
specifying the details of the service and the related terms and conditions.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by each party, and intending to be legally bound
hereby, ARTES and THERAPEUTICS agree as follows:

1.   Definitions

(a)   “Act” means the United States Federal Food, Drug, and Cosmetic Act.   (b)
  “Active Pharmaceutical Ingredient” as used herein shall mean the active drug
substance or substances contained in the Study Drug.   (c)   “Change Order”
shall mean the written amendment that details a substantive change to the Work
Order (See example in Exhibit 2.).   (d)   “FDA” as used herein shall mean the
United States Food and Drug Administration.   (e)   “Good Clinical Practice”
shall mean Good Clinical Practices as defined by the FDA and as amended from
time to time.   (f)   “Good Laboratory Practice” shall mean Good Laboratory
Practices as defined by the FDA and as amended from time to time.   (g)   “IDE”
shall mean Investigational Device Exemption as defined by the FDA or foreign
equivalent.   (h)   “IND” as used herein shall mean an Investigational New Drug
Application, as defined by the FDA.

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(i)   “IRB” as used herein shall mean the board(s) established pursuant to 21
CFR Part 56 for the purpose of reviewing clinical investigations.   (j)  
“Investigator(s)” as used herein shall mean a licensed physician who is a
qualified clinical investigator willing and able, and engaged to conduct a
clinical investigation of the Study Drug or Device as set forth in a Protocol.  
(k)   “NDA” as used herein shall mean a New Drug Application, as defined by the
FDA, or foreign equivalent.   (l)   “Phase I Clinical Study” as used herein
shall mean those human clinical studies on sufficient numbers of persons that
are designed to establish that a product is safe for its intended use and to
support its continued clinical testing.   (m)   “Phase II Clinical Study” as
used herein shall mean those human clinical studies on sufficient numbers of
persons that are designed to establish the safety and efficacy of a product for
its intended use.   (n)   “Phase III Clinical Study” as used herein shall mean
an expanded human study of a level necessary for submission of an NDA to, and
approval for marketing of a product by the FDA.   (o)   “PMA” as used herein
shall mean Pre-Market Approval for a device as defined by the FDA or foreign
equivalent   (p)   “Project” as used herein shall mean those specific composite
goals, objectives, activities, times, durations, costs and responsibilities
described in a Work Order.   (q)   “Protocol” as used herein shall mean
particular preclinical or clinical testing procedures and conditions for the
clinical evaluation of the Study Drug or Device, used from time to time, during
the Term (as defined in Section 3(a)).   (r)   “Services” as used herein shall
mean the services to be provided to ARTES by THERAPEUTICS pursuant to a Work
Order (as defined in Section 2).   (s)   “Study” as used herein shall mean the
preclinical or clinical research described in a Protocol.   (t)   “Study Drug or
Device” as used herein shall be defined in a Work Order and shall mean the drug,
biologic, medical device or similar product including any and all of its
components, and related test articles being tested in a Study for which
THERAPEUTICS is providing Services as described in a Protocol or product
development plan.   (u)   “510K” as used herein shall mean a submission route to
register a medical device for marketing as defined by the FDA or foreign
equivalent.

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2.   Work Orders, Nature of Work   (a)   Work Orders The specific details of
each Project under this Master Agreement shall be separately negotiated and
specified in writing on a Work Order in a form substantially similar to that
attached to this Master Agreement as Exhibit 1. Each Work Order will include, as
applicable, the Protocol title or project description, a detailed description of
the Services to be performed by THERAPEUTICS, the specifications of the
applicable Study Drug or Device, including the Active Pharmaceutical Ingredient
(if applicable), timeline, budget and payment schedule and such other terms as
shall be agreed upon by the parties. The terms of this Master Agreement shall be
automatically incorporated into the terms of any Work Order. This Master
Agreement and each Work Order, independent from other Work Orders, constitute
the entire agreement for a Project. To the extent any terms or provisions of a
Work Order conflict with the terms and provisions of this Master Agreement, the
terms and provisions of this Master Agreement shall control, unless otherwise
expressly set forth in the Work Order.   (b)   Change Orders Any material change
in the details of a Work Order shall require execution of a Change Order, which
shall be in a form substantially similar to that attached to this Master
Agreement as Exhibit 2. Each Change Order shall detail the requested changes to
the applicable task, responsibility, duty, budget, timeline or other matters. A
Change Order will only become effective upon the execution of the Change Order
by both parties.   (c)   Transfer of Obligations Notwithstanding any other
provision of this Master Agreement, and in addition to any other specific
responsibilities of THERAPEUTICS which are set forth herein, pursuant to 21 CFR
Part 312.52, ARTES may, from time to time, transfer and THERAPEUTICS may assume
all or some of the specific obligations of ARTES as “Sponsor” under the Act. A
description of such obligations to be transferred to THERAPEUTICS will be
provided in each Work Order. It is agreed that the same description and extent
of obligations transferred will be included in Section #13 of any applicable
INDs filed on Form FDA 1571. THERAPEUTICS agrees to carry out diligently all
transferred obligations.   (d)   Performance of Services THERAPEUTICS agrees to
use commercially reasonable efforts to diligently perform, and to cause its
employees, officers, permitted subcontractors and representatives to diligently
perform the Services in accordance with the terms and conditions of this Master
Agreement and each Work Order. Such efforts may include, without limitation,
implementing reasonable procedures such as bonuses and other incentives for
timely completion of the Services. EXCEPT AS SET FORTH IN THIS SECTION 2(d) OR
ELSEWHERE IN THIS MASTER AGREEMENT, THERAPEUTICS MAKES NO OTHER REPRESENTATIONS
OR WARRANTIES WITH RESPECT TO THE SERVICES, EXPRESS OR IMPLIED, AND THERAPEUTICS
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF

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    MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE
SERVICES TO BE PROVIDED HEREUNDER.   3.   Term and Termination   (a)   This
Master Agreement shall commence on the Effective Date and shall have an initial
term of three (3) years (the “Initial Term”), unless earlier terminated as
provided herein. The Initial Term will be automatically renewed for additional
one (1) year terms (“Subsequent Term(s)”), unless either party notifies the
other not less than ninety (90) days prior to the end of the Initial Term, or
any Subsequent Term, that such party does not wish to renew this Master
Agreement. The Initial Term and any Subsequent Terms shall be referred to
collectively as the “Term”.   (b)   Either party may terminate this Master
Agreement, or any Work Order, upon written notice to the other party, if the
other party materially breaches this Master Agreement, or such Work Order. Both
parties agree to allow the breaching party a reasonable time, but not less than
90 days, to use best efforts to correct said breach and provide satisfactory
evidence of corrective actions in a timely manner. Failure to cure the breach
within such 90-day period shall entitle the non-breaching party to terminate
this Master Agreement, or any Work Order, immediately by written notice to the
breaching party.   (c)   ARTES may terminate any Work Order for any reason upon
ninety (90) days prior written notice to THERAPEUTICS.   (d)   If either party
believes termination of any Work Order is necessary to protect the safety or
welfare of the Study subjects, then such party shall have the right to terminate
the applicable Work Order upon written notice to the other party.   (e)   In the
event of termination of this Master Agreement or any Work Order, ARTES and
THERAPEUTICS agree to discuss, cooperate and coordinate termination of
activities being conducted by THERAPEUTICS. As soon as reasonably possible after
receipt of any written termination notice by either party, THERAPEUTICS will use
commercially reasonable efforts to stop initiation of any tasks or activities
not yet started as of the date of termination notice, whether to be conducted by
THERAPEUTICS or a third party, unless another plan of termination is agreed to
by both parties, however both parties acknowledge non-cancelable costs may exist
and will require payment as detailed in Section 3(h). In all cases of
termination, a reasonable plan of action for cessation of activities will be
agreed to by both parties to ensure an orderly cessation of on-going tasks and
activities in order to protect the safety and rights of patients, as well as the
legal responsibilities of all parties involved according to applicable local,
federal and/or state laws, regulations and ordinances. THERAPEUTICS will use
commercially reasonable efforts to terminate all Work Order associated tasks
according to the plan agreed to by both parties.

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(f)   Upon termination of this Master Agreement or any Work Order, THERAPEUTICS
will, at ARTES’ written request, promptly provide ARTES with a copy of all
records relating to Project performance and all periodic reports and/or patient
records, maintaining confidentiality.   (g)   Should ARTES choose to terminate a
Work Order prior to completion for any reason other than THERAPEUTICS’ material
breach of this Master Agreement or any Work Order, insolvency or bankruptcy,
ARTES agrees to pay THERAPEUTICS:

  (i)   all reasonable direct fees, including monthly fees for project
management, medical monitoring, transfer of records or similar fees earned
hereunder for Services performed up to the effective date of termination in
accordance with the terms of the Work Order being terminated;     (ii)   all
non-cancelable costs for third party contracted Services and other expenses,
including THERAPEUTICS related administrative fees, incurred in connection with
any Work Order being terminated to the date of termination; and     (iii)   a
separate termination fee equivalent to 10% of the entire Work Order budget.

(i)   In the event a Work Order is terminated by ARTES before conclusion by
reason of any uncured material breach by THERAPEUTICS pursuant to Section 3(c)
above, any third party pass-through costs associated with terminating the Work
Order, e.g. laboratory costs, etc. will be:

  (i)   borne by THERAPEUTICS if attributable to THERAPEUTICS’ material breach
of its obligations under the Master Agreement or Work Order and previously paid
to THERAPEUTICS;     (ii)   borne by ARTES if not previously paid to
THERAPEUTICS; or     (iii)   negotiated between ARTES and THERAPEUTICS if
neither of the above (i)(i) and (i)(ii) applies.

(j)   Sections 3(f, g, h, and i), 5(b), 6, 7, 8, 10, 11, 12, 13, 15, 16(c), 24,
25 and 27 shall survive any expiration or termination of this Master Agreement
to the extent of the terms detailed in each respective Section.

4.   Work Order Compensation

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(a)   Unless otherwise provided for and agreed to in a particular Work Order,
the following shall apply with respect to all payments by ARTES for Services
under a Work Order:

  (i)   THERAPEUTICS will be compensated for its Services, itemized expenses,
and pass-through costs, net of discounts, incurred in the performance of the
Services pursuant to the budget and payment schedule set forth in each
respective Work Order.     (ii)   All income-related taxes (and penalties
thereon) imposed on any payment by ARTES to THERAPEUTICS shall be the
responsibility of THERAPEUTICS.     (iii)   THERAPEUTICS will submit monthly
invoices to ARTES which shall contain sufficient itemizations for fees, expenses
and pass-through costs related to a Work Order.     (iv)   THERAPEUTICS will
invoice ARTES promptly upon achievement of agreed to milestones (if other than
monthly), as set forth in the applicable Work Order, for payment of Services.  
  (v)   Invoices shall be payable by ARTES within thirty (30) days in U.S.
dollars after receipt by ARTES (late payments will incur interest at a rate
equal to 1.5% for each 30 day period, or part thereof, an invoice remains unpaid
after the due date).

(b)   If any portion of an invoice is disputed, then ARTES shall notify
THERAPEUTICS in writing and shall pay the undisputed amounts in compliance with
Section 4(a)(v) and the parties shall use good faith efforts to reconcile the
disputed amount as soon as practicable. THERAPEUTICS shall maintain adequate
accounting records for all receipts and disbursements of supplies and monies
directly related to any Work Order. ARTES shall be permitted to audit these
records, at ARTES’ expense, during normal business hours upon reasonable notice
to THERAPEUTICS. THERAPEUTICS will be reimbursed for reasonable expenses,
including related labor expenses related to all audit activities.

(c)   It is the parties’ expectation that the budget for any Work Order relating
to Services to be provided by THERAPEUTICS will be negotiated by the parties
prior to submitting a formal Work Order for Services.

5.   Personnel

(a)   The Services with respect to each Project shall be performed by
THERAPEUTICS under the direction of the person identified as the Project Manager
in the applicable Work Order. THERAPEUTICS will perform its Services in a
professional, thorough and timely manner and will ensure that the

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    personnel or subcontractors it uses to perform the Services are
appropriately trained and qualified. ARTES shall be entitled in good faith to
request that the Project Manager be removed and replaced with a new Project
Manager, and THERAPEUTICS shall make best efforts to honor such request. ARTES
shall, upon request, be entitled to review credentials of all other personnel
providing Services as per the Work Order and in good faith may request that any
staff member be replaced and THERAPEUTICS shall make best efforts to honor such
request.

(b)   NON — SOLICITATION

  (i)   Non-solicitation by ARTES. ARTES agrees that during the Term of this
Master Agreement, and for a period of two (2) years after the termination of
this Master Agreement, ARTES will not directly or indirectly solicit any
personnel of THERAPEUTICS or its then current contractors to leave the service
of THERAPEUTICS to become employed by ARTES.     (ii)   Non-solicitation by
THERAPEUTICS. THERAPEUTICS agrees that during the Term of this Master Agreement,
and for a period of two (2) years after the termination of the Master Agreement,
THERAPEUTICS will not directly or indirectly solicit any personnel of ARTES to
leave the service of ARTES to become employed by THERAPEUTICS.     (iii)  
Finder Fee. Notwithstanding the foregoing, THERAPEUTICS and ARTES may mutually
agree upon either party hiring certain employees from the other if the hiring
party pays a finder fee of 20% of the first year’s annual base salary and
reimburses the other party for reasonable training and related out-of-pocket
expenses.     (iv)   Enforceability. The provisions of this Non-Solicitation
Section shall be construed as enforceable in both law and equity, including by
temporary or permanent restraining orders, notwithstanding the existence of any
claim or cause of action by either party against the other party whether
predicated on this Master Agreement or otherwise.

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6.   Confidentiality

(a)   Any confidential information (“Confidential Information”) of a party
(“Discloser”) acquired by the other party (“Recipient”) under this Master
Agreement or any Work Order, including, without limitation, the results of any
Study or Project, shall not be disclosed to any third party who does not have a
need to know such Confidential Information for purposes of performing
Recipient’s obligations under this Master Agreement or any Work Order, without
the prior written authorization from Discloser. Recipient shall use the
Confidential Information only for the purpose of fulfilling its obligations
under this Master Agreement or any Work Order. Recipient represents and warrants
that it has obtained or will obtain agreements with its employees and agents
(including subcontractors) to maintain the confidentiality of all Confidential
Information as provided herein.

(b)   The obligations of Recipient with regard to Confidential Information shall
continue for a period of ten (10) years from the date that such Confidential
Information is acquired by Recipient.

(c)   The obligations of Recipient regarding the confidentiality and
nondisclosure of Confidential Information as provided in this section shall not
apply to information that:

  (i)   is already known to Recipient without prior disclosure from Discloser,
as shown by Recipient’s prior written records;     (ii)   Recipient can
demonstrate by written records was developed for or by Recipient, independent of
any Confidential Information of the Discloser;     (iii)   becomes publicly
available through no fault of Recipient;     (iv)   is received from a third
party that has the legal right to disclose it to Recipient; or     (v)   is
required by law to be disclosed; provided that Recipient notifies Discloser in
writing of its intention to disclose Confidential Information with sufficient
time to allow Discloser to seek a protective order or file an application for
confidential treatment as may be permissible.

(d)   Recipient acknowledges that the disclosure of Confidential Information
without Discloser’s expressed permission may cause Discloser irreparable harm
and that the breach or threatened breach of nondisclosure provisions of this
Master Agreement may entitle Discloser to seek injunctive relief, in addition to
any other legal remedies that may be available.

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7.   Ownership and Inventions

(a)   All materials, documents and information, programs and suggestions of
every kind and descriptions provided by ARTES to THERAPEUTICS or to
Investigators and all data or reports resulting from any Study and/or generated
by Investigators participating in a Study or prepared by THERAPEUTICS in
connection with the Services performed hereunder shall be the sole and exclusive
property of ARTES.

(b)   THERAPEUTICS shall retain and preserve one (1) copy only of all such
property of ARTES for a period of two (2) years after the NDA, 510K or PMA has
been approved by the FDA or a Project has been discontinued. At the end of such
two (2) year period, THERAPEUTICS shall give ARTES written notice of its intent
to destroy any of such material at least thirty (30) days prior to destruction.
If ARTES requests such material, THERAPEUTICS shall provide such material to
ARTES at ARTES’ expense. Failure of ARTES to request such material or to respond
to such notice within the thirty (30) day period shall be evidence of ARTES’
acquiescence to the destruction of such material.

(c)   All rights, title and interest in any and all data shall be owned solely
and exclusively by ARTES. All rights, title and interest in any discoveries or
inventions directly arising from the Services provided to ARTES pursuant to this
Master Agreement and/or Work Order that are directly related to the Active
Pharmaceutical Ingredient shall be owned solely and exclusively by ARTES
regardless of inventorship unless otherwise agreed to by the Parties.
THERAPEUTICS will promptly disclose in writing to ARTES or its nominee any and
all inventions, discoveries, improvements and modifications, conceived or
reduced to practice by THERAPEUTICS arising from the Services provided to ARTES
pursuant to this Master Agreement or any Work Orders that are directly related
to the Active Pharmaceutical Ingredient. THERAPEUTICS agrees to assign all its
interest therein to ARTES or its nominee and, whenever requested to do so by
ARTES, THERAPEUTICS will execute any and all applications, assignments or other
instruments and give testimony deemed necessary to apply for and obtain patent
letters in the United States or any foreign country or to otherwise protect
ARTES’ interests, therein, at ARTES’ sole cost and expense, including the
payment of THERAPEUTICS’ standard rates therefor.

These obligations shall continue beyond the termination of this Master Agreement
for a period of one (1) year and shall be binding upon THERAPEUTICS’ successors,
assignees, administrators, subcontractors and other legal representatives.

8.   Access to Records

THERAPEUTICS will permit representatives of ARTES and/or any authorized
regulatory authorities to have access at reasonable times to THERAPEUTICS’
premises for the purpose of observing performance of the Services and/or
reviewing resulting data.

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9.   Adverse Experience Reporting

Pursuant to any Protocol attached to any Work Order, THERAPEUTICS agrees
throughout the duration of this Master Agreement, to promptly notify ARTES of
any information concerning any serious or unexpected event or injury, and the
severity thereof, associated with the clinical uses, studies, investigations or
tests, whether or not determined to be attributable to any Study Drug or Device.

10.   Publications

Project results may not be published or publicly disclosed, in whole or in part,
by THERAPEUTICS or its affiliates without the prior express written consent of
ARTES.

11.   Indemnification

(a)   ARTES agrees to indemnify, defend and hold harmless THERAPEUTICS, its
respective officers, trustees, affiliates, agents, servants, employees,
successors and independent contractors (hereafter collectively referred to as
“THERAPEUTICS Indemnitees”) from and against any and all losses, costs
(including the reasonable costs of providing medical care), expenses (including
reasonable attorneys’ fees), claims, actions, liability and/or suits
(collectively, “Claims”) suffered or incurred by a THERAPEUTICS Indemnitee as a
result of (i) bodily injury to a patient in any Study being conducted pursuant
to this Master Agreement or any Work Order directly or indirectly caused by
administration of a Study Drug or Device, or (ii) ARTES’ negligent performance
of the obligations required under this Master Agreement or any intentional or
reckless misconduct by ARTES, except to the extent that any such Claims are
caused by the negligence or intentional or reckless misconduct of any
THERAPEUTICS Indemnitee.       ARTES shall further indemnify, defend and hold
harmless the THERAPEUTICS Indemnitees from any Claims in contract or tort
(including strict liability claims) that relate to the safety or efficacy of the
Active Pharmaceutical Ingredient or any component of the Study Drug or Device.

(b)   THERAPEUTICS agrees to provide ARTES with prompt notice of any such Claim.
In the event the aforesaid indemnity is invoked, ARTES shall have the right, but
not the obligation, to manage and control the defense and settlement of any and
all such actions and lawsuits, and shall have the right to select and engage
counsel of its own choice. THERAPEUTICS shall cooperate fully with ARTES in the
defense of any and all actions and lawsuits. No THERAPEUTICS Indemnitee shall be
entitled to compromise or settle any such Claim without prior written approval
of ARTES

(c)   THERAPEUTICS agrees to indemnify, defend and hold harmless ARTES, its
parents, subsidiaries and affiliates, as well as the officers, directors,
employees

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    and agents of each (hereafter collectively referred to as “ARTES
Indemnitees”), against and in respect of any and all losses, costs (including
the reasonable costs of providing medical care), expenses (including reasonable
attorneys’ fees), claims, actions, liability and/or suits (collectively,
“Claims”) suffered or incurred by any ARTES Indemnitee resulting from
THERAPEUTICS’ negligent performance of the obligations required under this
Master Agreement or any Work Order, or from any intentional or reckless
misconduct, including any negligent failure on the part of THERAPEUTICS to honor
THERAPEUTICS’ financial obligations to any subcontractor of THERAPEUTICS.

(d)   ARTES agrees to provide THERAPEUTICS with prompt notice of any such Claim.
In the event the aforesaid indemnity is invoked, THERAPEUTICS shall have the
right, but not the obligation, to manage and control the defense and settlement
of any and all such actions and lawsuits, and shall have the right to select and
engage counsel of its own choice. ARTES shall cooperate fully with THERAPEUTICS
in the defense of any and all actions and lawsuits. No ARTES Indemnitee shall be
entitled to compromise or settle any such Claim without prior written approval
of THERAPEUTICS.

(e)   ARTES shall, at the request of THERAPEUTICS or an Investigator, execute
and deliver to the Investigator a letter setting forth ARTES’ obligations to the
Investigator under sub-paragraph (a).

12.   Force Majeure and Delays

In the event either party shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reasons of strike, lockouts, labor
troubles, inability to procure materials, failure of power or restrictive
government or judicial orders, or decrees, riots, insurrection, war, acts of
terrorism, acts of God, inclement weather or other similar reason or cause
beyond that party’s control (not including the inability of a party’s software
to perform data-dependent calculations properly), then performance of such act
(except for the payment of money owed) shall be excused for the period of such
delay; provided, however, if such delay continues in excess of eight (8) weeks,
either party may terminate the affected Work Order(s) without penalty under any
Work Order, except that ARTES shall be obligated to pay THERAPEUTICS (a) all
reasonable direct fees earned under this Master Agreement or the terminated Work
Order(s) up to the effective date of termination in accordance with the terms of
the terminated Work Order(s), and (b) all non-cancelable costs incurred in
connection with the terminated Work Order(s) to the date of termination.

13.   Notices

Whenever any notice is to be given pursuant to this Master Agreement, it must be
in writing using postage prepaid first class certified mail with return receipt
requested, delivery prepaid nationally recognized overnight carrier, or
facsimile to the addresses set forth below:

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     THERAPEUTICS:   Therapeutics, Inc.
9025 Balboa Avenue, Suite 100
San Diego, CA 92123
Attn: Daniel Piacquadio, M.D.
          President and CEO

FAX: 858-571-1234

     ARTES:   Artes Medical, Inc.
5870 Pacific Center Boulevard
San Diego, CA 92121
Attn: Karla Kelley, R.N., J.D.
          Chief Legal Officer, General Counsel
          and Corporate Secretary

FAX: (858) 875-5609

Such notice shall be effective five days after deposit if sent by mail, the next
business day if sent by overnight carrier and upon receipt of electronic
confirmation of delivery if sent by facsimile.

14.   Legal Compliance

THERAPEUTICS shall perform all work under this Master Agreement and any Work
Order in conformity with all applicable federal, state and local laws and
regulations including but not limited to the Act and the regulations promulgated
pursuant thereto, as amended from time to time, and with the standard of care
customary in the contract research organization industry. For purposes of ARTES
providing the FDA with certification pursuant to Section 306(k) of the Act,
THERAPEUTICS warrants that no person (including Investigators, sub-investigators
or any other person working under the supervision of THERAPEUTICS) performing
Services pursuant to this Master Agreement or any Work Order has been debarred
or convicted of crimes pursuant to Sections 306(a) and (b) of the Act and under
the U.S. Generic Drug Enforcement Act of 1992, 21 U.S.C. §§335(a) and (b), as
amended. THERAPEUTICS agrees to notify ARTES as soon as practicable upon
THERAPEUTICS’ learning of the occurrence of any such debarment, conviction, or
inquiry relating to a potential debarment, of any person performing Services
pursuant to this Master Agreement or any Work Order and agrees that said person
shall be immediately prohibited from performing Services under this Master
Agreement or any Work Order.
ARTES represents that it shall not request THERAPEUTICS to perform assignments
or tasks that violate any applicable law or regulation.

15.   Regulatory Inspections

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If any governmental or regulatory authority conducts or gives notice to
THERAPEUTICS of its intent to conduct an inspection of THERAPEUTICS or at any
Study site or take any other regulatory action with respect to the Services
provided under this Master Agreement or any Work Order, THERAPEUTICS shall
(a) cooperate with ARTES and reasonably act to obtain the cooperation of any
Investigators; (b) provide ARTES prior notice of any inspection or other
regulatory action; and (c) allow ARTES the right to be present at any such
inspection. ARTES shall have primary responsibility of preparing and
THERAPEUTICS shall cooperate in the preparation of any responses which may be
required to any governmental or regulatory authority with regard to any such
inspection or regulatory action, and any required follow-up actions. ARTES shall
have the sole opportunity to challenge any order of a regulatory or governmental
activity affecting its IND, NDA, IDE, 510K or PMA or any Project. If
THERAPEUTICS has attempted to comply with the provisions of this Section 15 but
is nevertheless required by a governmental or regulatory authority to comply
with its demand or request, then compliance by THERAPEUTICS shall not cause a
breach of this Master Agreement. THERAPEUTICS will be reimbursed reasonable
expenses, including labor expenses related to all regulatory inspections.

16.   Insurance

(a)   THERAPEUTICS and ARTES each represents that it maintains and will continue
in force during the Term of this Master Agreement, at its sole cost and expense,
the minimum insurance coverage listed below. Each party shall provide to the
other certificates of insurance evidencing the insurance required hereunder and
will provide prompt written notice to the other party prior to any cancellation
of such coverage or material change in such coverage.

  (i)   Comprehensive automobile liability insurance for vehicles furnished by
such party or used by such party in the performance of this Master Agreement or
any Work Order with bodily injury and property damage limits of at least
$1,000,000 each occurrence, combined single limit;     (ii)   Commercial general
liability insurance with bodily injury and property damage minimum limits of
$1,000,000 each occurrence, with an aggregate combined single limit of at least
$2,000,000;     (iii)   Excess liability insurance with minimum limits of
$1,000,000 per occurrence/aggregate combined single limit which shall be excess
of the coverage described in Section 16(a)(i) and limits of $2,000,000 per
occurrence/aggregate combined single limit which shall be excess of the coverage
described in Section 16(a)(ii) above;

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  (iv)   With respect to THERAPEUTICS only worker’s compensation and
occupational disease disability insurance as required by the laws of the
state(s) in which Services are to be performed; and     (v)   With respect to
ARTES only, product and clinical trials liability insurance in the amount of at
least $10,000,000 combined single limit.

(b)   To the extent permitted by law, the insurance set forth above as well as
any other coverage agreed to be purchased hereunder shall contain waivers of
subrogation and/or rights of recovery as to claims against the other party. This
waiver shall not apply if the responsible party was grossly negligent.

(c)   THERAPEUTICS shall be identified as an additional insured under ARTES’
product and clinical trials liability insurance described in Section 16(a)(v)
above.

(d)   THERAPEUTICS and ARTES agree that with regard to this Master Agreement,
the insurance coverage to be provided hereunder shall be considered as primary
insurance and not contributory with any similar instance which the other party
and/or its employees and agents may maintain on their own behalf.

17.   Assignment

Other than to a successor, this Master Agreement and each Work Order may not be
assigned by either party without the other party’s prior written consent, which
consent shall not be unreasonably withheld.

18.   Independent Contractors

For purpose of this Master Agreement, the relationship between the parties is
that of an independent contractor and neither party shall have the authority to
bind or act on behalf of the other party without its prior written consent.
Nothing contained in the Master Agreement shall be construed to create the
relationship of principal and agent or employer and employee between ARTES and
THERAPEUTICS, or their respective employees, servants, agents or independent
contractors.

19.   Relationship with Investigators and Vendors

If a particular Work Order obligates THERAPEUTICS to contract with a vendor,
Investigator(s) or investigative site, then any such contract shall be on a form
mutually acceptable to THERAPEUTICS and ARTES, and any material changes to such
form shall require prior approval by ARTES. ARTES will be responsible for
promptly reviewing, commenting on and/or approving such form contracts and
proposed changes.

20.   Advertising

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THERAPEUTICS shall not issue any information or statement to the press or public
relating to the results of any Study without the prior written consent of ARTES.
Neither party shall use the name or trademarks of the other party in any
announcement, publication or promotional material or in any form of public
distribution without the prior written consent of the other party which shall
not be unreasonably withheld by the other party except as required by applicable
law, any court or administrative order or any Work Order.
Notwithstanding the foregoing provisions of this Section 20, THERAPEUTICS shall
have the right to include the name of ARTES in any listing of clients, the type
of services provided and the respective fees charged or forecasted to be charged
for the sole purpose of providing such information to board members, financial
institutions and prospective equity or debt investors in THERAPEUTICS.

21.   THERAPEUTICS Representations

THERAPEUTICS represents that: (a) it has the right and authority to enter into
this Master Agreement and to perform the Services required pursuant to each Work
Order; (b) the person executing this Master Agreement has the authority to do
so; and (c) THERAPEUTICS is not a party to any existing agreement or arrangement
that would prevent THERAPEUTICS from entering into this Master Agreement or
would adversely affect THERAPEUTICS’ performance under this Master Agreement.
These representations will also apply with respect to the execution of each Work
Order by THERAPEUTICS.

22.   Severability

If any provision of this Master Agreement or any Work Order shall be deemed void
in whole or in part for any reason whatsoever, the remaining provisions shall
remain in full force and effect.

23.   Estoppel

The waiver or forbearance by either party or the failure by either party to
claim a breach of any provision of this Master Agreement or any Work Order shall
not be deemed to constitute a waiver or estoppel with respect to any subsequent
breach or with respect to any provision thereof.

24.   Applicable Law

This Master Agreement shall be governed by and construed in accordance with the
laws of the State of California.

25.   Descriptive Heading

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The descriptive heading of the Master Agreement sections are inserted for
convenience only and shall not control or affect the meaning or construction of
any provision hereof.

26.   Binding Effect

The Master Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns. THERAPEUTICS shall not have the
right to assign the Master Agreement or any of the rights or obligations
hereunder without the prior written consent of ARTES provided that such consent
shall not be unreasonably withheld.

27.   Entire Understanding

This Master Agreement and each Work Order represents the entire understanding of
the parties with respect to the subject matter hereof. Any modification to this
Master Agreement or any Work Order must be in writing and signed by both
parties.

28.   Counterparts

This Master Agreement may be executed in multiple counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Master Agreement as of
the Effective Date.

                              Therapeutics, Inc.       Artes Medical, Inc.    
 
                           
By:
              By:                                  
 
      Daniel Piacquadio, M.D.               Diane S. Goostree    
 
  Title:   President and CEO           Title:   President and CEO    

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EXHIBIT 1
THIS EXHIBIT IS AN EXAMPLE. THE CONTENT OF EACH SPECIFIC WORK ORDER WILL BE
DETERMINED BASED UPON THE SCOPE AND REQUIREMENTS OF THE WORK TO BE PERFORMED.
CONSEQUENTLY, THE BUDGET AND SPECIFIC TERMS MAY VARY BASED UPON THE COMPLEXITY
OF THE WORK ORDER. SIMILARLY, THE RATES NOTED IN THIS EXAMPLE MAY NOT REFLECT
CURRENT PRICING AS IT IS AN EXAMPLE AND RATES MAY CHANGE FROM TIME TO TIME.
PLEASE REFER TO AN ACTUAL WORK ORDER FOR FINAL TERMS AND PRICING.
Work Order — Number XXXX (X)
DXX-XXXX-XX
This Work Order (“Work Order”) and the Master Service Agreement (“Master
Agreement”) between the parties signed below, dated XXXXX XX, 200X, which is
incorporated by reference, sets forth the specific terms and conditions relating
to the Services.

1.   Scope of Services (“Services”)

  a.   This Work Order is for clinical research services related to Protocol
DXX-XXXX-XX (“Protocol”).     b.   The description of the Project (“Project”)
is:        
 
       
 
       
 
       
 

  c.   THERAPEUTICS shall conduct the Services required by the Project,
including any written Change Orders thereto that are signed by both parties, in
accordance with the procedures and methodology specified by ARTES in writing of
the Protocol. Both THERAPEUTICS and ARTES agree to manage the Project to a
mutually agreed Project timeline and the Services as defined herein, which may
be modified from time to time based upon the needs of the Project and as
specified in written Change Orders.

2.   Study Period

The Project will commence on XXXXX XX, 200X with expected completion in
approximately XXXXX (XX) months, on or about XXXXX XX, 200X, depending upon

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a variety of factors including but not limited to availability of clinical
supplies and ARTES’ submission of and FDA acceptance of the proposed development
plan.

3.   Description of Services

  a.   General supervision of all Protocol related activities or budget
specified subcontractors.     b.   Protocol, consent and case report form
(CRF) review; includes up to two (2) revisions; additional revisions at hourly
rates. Subject to ARTES review and approval.     c.   Investigator selection to
the extent required. Subject to ARTES review and approval.     d.   Performance
of all clinical site monitoring.     e.   Medical monitoring, as required.    
f.   Data entry and statistical analysis.     g.   Clinical study report
writing; includes initial draft and up to two (2) revisions; additional
revisions at hourly rates.     h.   THERAPEUTICS will have contract signing
authority for ARTES for third party contractors required for this Work Order,
subject to Section 19 of the Master Agreement.

4.   Project Budget / Fees and Expenses

  a.   The Budget for this Work Order is $XXX,XXX.     b.   The actual fees
charged ARTES for this Work Order shall not exceed a 15% overage of the Budget,
or $XX,XXX, resulting in a total fee of up to $XXX,XXX, without the written
approval of ARTES.     c.   At any activity stage of the Project, if it is
estimated or determined by either ARTES or THERAPEUTICS that the total fee for
the Project may exceed the Budget plus the 15% overage allowance, THERAPEUTICS
and ARTES shall promptly discuss the matter and both parties will jointly arrive
at a revised Budget that is reasonable under the circumstances.     d.   Any
work requested by ARTES which is not specified in the Budget or items deleted
from the Budget, as provided by the terms of the Master Agreement, will result
in an increase or decrease, respectively, to the Budget as mutually agreed to by
ARTES and THERAPEUTICS.     e.   The detailed Budget for this Work Order is
attached.

5.   Service Definitions and Fees

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  a.   The Budget attached to this Work Order provides the initial cost estimate
for the Project based upon the anticipated scope and duration as outlined.
Actual billings for some of the Budget line items may vary. Fees for the Budget
line items with a cost code designation “A” commence the month the Project
begins and will continue to be billed at the stated fixed monthly rate through
the completion month of the Project. Budget line items with cost code “B” will
be billed at the budgeted amount. Budget line items with cost code “C”
designates variable costs which may accumulate to be more or less than the
Budget amount depending upon the actual time expended by THERAPEUTICS staff
and/or direct costs incurred. Budget line items with cost codes “D” and “E” are
variable fees billed as costs are incurred.     b.   Case Report Form (“CRF”),
Informed Consent Form (“ICF”) and Diary Development Forms (“DDF”)

  1.   Creation means CRF, ICF and DDF design and development — fixed fee.    
2.   Review means THERAPEUTICS review of CRFs, ICFs or DDFs designed by others —
fixed fee.     3.   Reproduction and Assembly means CRF printing, materials and
assembly, which is billed at actual cost plus 10%. The QC and management
provided by THERAPEUTICS is billed at a fixed fee of $750 for the first site and
$200 for each additional site. Each CRF amendment that requires Reproduction and
Assembly is billed at the same rates.     4.   Guidelines mean developing
instructions for completing CRFs — fixed fee.     5.   Source Documents means
developing template source document(s) based upon the CRFs for the discretionary
use by the sites — fixed fee.     6.   Quotes include up to two (2) minor
revisions. Additional revisions requested by ARTES billed on an hourly basis as
defined in the Budget exhibit.

  c.   IRB Fees & Services

  1.   IRB Fees & Services means all fees charged by IRBs, billed at actual cost
plus 10% along with a THERAPEUTICS origination fee of $750 and processing fee
billed at $250 per site for original applications and $125 for each required
amendment.     2.   Annual IRB fees and THERAPEUTICS processing fees, if
required, will be at the same rates.

  d.   Investigator Fees

  1.   Investigator Fees mean the actual fees paid to investigator sites in
accordance with the terms and conditions of the investigator site contracts and
are billed at actual cost plus 3.5%.     2.   Other investigator site expenses
such as supplies, shipping, site acknowledgements for work well done as is
industry practice, etc. are billed at actual cost plus 10%.     3.   A fixed fee
of $500 per site is billed to cover the cost for site selection, review and
screening of potential sites and final selection of Investigators. Contract
management fees of $750 per site and $250 per site for amendments shall also
apply.

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  e.   Site Set-Up & Close

  1.   Site Set-Up & Close means the set-up and close-out activities performed
at THERAPEUTICS’ corporate offices related to the investigator sites and files
(e.g. 1572’s, creation of trial/site specific logs, regulatory and general study
files, etc.).     2.   $1,375 is billed for each site as it is set-up and $1,375
is billed for each site as it is closed, for a total of $2,750 per site.

  f.   Site Monitoring

  1.   Site monitoring fees for each visit accumulate as follows: (a) the rate,
for travel time to and from the site (up to a maximum of 8 hours per day rounded
up to the nearest 1/4 hour) and on-site time (rounded up to the nearest 1/4
hour) is billed at $875 per day or part thereof; (b) a fixed fee equal to
0.75 days [or six (6) hours] for other visit related activities (e.g.
scheduling, trip preparation, visit follow-up and report writing, etc.) at the
rate of $875 per day will be charged for each site visit; and (c) a fixed fee of
0.25 days [or two (2) hours] for administrative support for CRF handling related
to data management and regulatory file updates at the rate of $875 per day will
be charged for each site visit. Site qualification verification for eligible
investigators that do not require an on-site visit will be billed at a reduced
fixed rate of $500 per site.     2.   Quality assurance audits shall be billed
in the same manner as in section 5.f.1 above.     3.   General site support
includes a fixed fee equivalent to 0.15 days [or one (1) hour] per site per
month at the rate of $875 per day for trial and regulatory file maintenance and
is billable during the entire duration of the project.     4.   Monitoring
travel expenses are billed as incurred at cost plus 10%.

  g.   Medical Monitoring

  1.   Medical Monitoring Fee is billed at a fixed monthly fee for the actual
project duration, starting in Month 3.     2.   Severe adverse event
(SAE) reporting will be billed separately at $1000/event during the study
period.

  h.   Data Management & Statistical Analysis

  1.   This category may include review of statistical modeling, protocol sample
size calculations and protocol development support, data entry and analysis,
report writing support, etc. and is subject to a THERAPEUTICS fixed management
fee. Actual budget to be determined pending formal bids from qualified vendors
based on finalized Protocol and CRF designs.     2.   It is a variable cost and
if all or part of this service is performed by THERAPEUTICS staff, that
component is billed at an hourly rate. If the data management and/or statistical
analysis is sub-contracted out, it is billed at actual cost plus 10%.

  i.   Project Preparation & Start-Up

  1.   Project Preparation & Start-Up means activities related to the general
set-up of the Project prior to investigator site initiation, including but not
limited to: developing a detailed project plan (timelines and identification of
deliverables,

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      etc.); ARTES and THERAPEUTICS’ assignment of roles and responsibilities
and allocation of project resources in support of the project plan; and project
planning meetings with ARTES to create a trial specific infrastructure and agree
on support tools to efficiently run and close-out the trial.

  2.   Fixed fee billed at Project initiation.

  j.   Senior Management Support

  1.   Senior Management Support means general project administration and
oversight by THERAPEUTICS senior staff including the Vice President of Clinical
Development and/or Directors for in-house activities related to the management
of the trial (e.g. weekly management review, etc.) plus administrative support
as required.     2.   Also included is the planning for and attendance at
meetings (e.g. by CEO and/or other Senior THERAPEUTICS staff) with ARTES, FDA,
etc. as requested by ARTES.     3.   Fees are variable and are billed at
standard rates for the actual hours incurred.

  k.   Travel (Non-Monitoring)

  1.   This category is for travel expenses (e.g. transportation, housing,
meals, etc.) incurred by THERAPEUTICS personnel in performing all Services other
than monitoring. This may include attendance at meetings not conducted in
THERAPEUTICS’ corporate office with ARTES and/or FDA, etc., as requested by
ARTES.     2.   Fees are variable and are billed at actual cost plus 10%.

  l.   TI Office Overhead

  1.   TI Office Overhead means general THERAPEUTICS infrastructure costs, a
pro-rata share of which are consumed in performing the Services including, but
not necessarily limited to, telephone, fax, in-house copying, general clerical
and administrative personnel support, facilities, etc.     2.   Fixed fee.

  m.   Investigator Meetings

  1.   Investigator Meetings means the planning and scheduling of the
Investigator Meeting including, as requested by ARTES, preparation of meeting
materials and logistics associated with conduct of the meeting (e.g.
transportation, housing and meals, etc. for principal investigators,
coordinators and THERAPEUTICS personnel), equipment and meeting room
arrangements, Investigator gifts, shipping meeting materials, etc.     2.   No
related expenses that would be incurred directly by ARTES are included.     3.  
Fees are variable and are billed at standard hourly rates with related pass
through expenses billed at cost plus 10%.

  n.   Miscellaneous

  1.   Miscellaneous means all fees and expenses incurred that are required to
perform the Services, but are not budgeted specifically as a line item
including, but not necessarily limited to: out-of-pocket expenditures for
shipping, cell phone usage, reproduction services, document shredding, transfer
of study records to sponsor, video- and teleconferencing, internet

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      based meeting support (e.g. Web-Ex) etc. and internal labor hours for
archiving documents related to the Project, etc.

  2.   Study audit and archiving activities are billed at the end of the study
at a fixed fee of 15,000.     3.   An allocation for cell phone, document
shredding and general teleconferencing fees (Web-Ex) are billed monthly at a
fixed fee of $550/month.     4.   All additional out-of-pocket expenditures such
as printing questionnaire and response cards, archiving supplies, shipping and
project specific conferencing are billed at cost plus 10% and internal labor
hours are billed at the standard rate as defined in the budget exhibit.

  o.   Contracting         For each third party contract and any subsequent
amendments as may be required related to this Work Order (e.g. principal
investigators, IRBs, third party vendors, etc.) a $750 origination fee will be
charged for each initial contract and $250 for each amendment to cover costs
related to the creation, negotiation as required, and coordination of all
parties involved. Estimates are included in their respective Budget line items.

  p.   Record Storage         Documents related to this Work Order will be
retained and stored by THERAPEUTICS. Fees related to the storage of these
materials for a two (2) year period will be invoiced in advance at the end of
the study and are currently estimated at $100 per year, but may vary with the
magnitude of the trial and quantity of materials. Any storage requirements
beyond this two (2) year period will be invoiced as incurred. Materials will be
stored for at least two (2) years after the formal discontinuation of the
clinical development of the investigational product, or for at least two
(2) years after the last approval of a marketing application in an International
Conference of Harmonization (ICH) region and there are no pending or
contemplated marketing applications in an ICH region, unless directed otherwise
in writing by ARTES.

6.   Invoicing and Payment Terms

  a.   Monthly invoices for Services will be prepared and forwarded
approximately ten (10) days after the end of the month during which the
corresponding fees are earned. Invoices ordinarily will be dated as of the last
day of the month for which they apply and are mailed via first class mail unless
requested otherwise by ARTES.     b.   Supporting documentation for invoices
will be submitted in accordance with the terms and conditions of the Master
Agreement including the submission of receipts for expenses of $25 or greater
per transaction.     c.   All third party contracts (e.g. investigator fees,
laboratory costs, IRB fees, etc.) are billed 60 days in advance of the
anticipated payment date by THERAPEUTICS.     d.   Payment terms:

  1.   Payments are to be made in U.S. Dollars.

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  2.   Payment terms are Net 30 days from the date of the invoice.     3.  
Payments not received within 30 days from the invoice date are subject to a 1.5%
late fee for each full or partial month the payment is past due.

7.   THERAPEUTICS Personnel       THERAPEUTICS shall assign a full staff that is
comprised of appropriately trained individuals with experience in conducting and
managing the Services that are described in this Work Order. The Project Manager
for the Project will be assigned prior to initiation.

8.   Work Authorization       ARTES’ execution and return of one copy of the
Work Order and any attachments hereto shall constitute authorization for
THERAPEUTICS to conduct the Services.

    IN WITNESS WHEREOF, the parties hereto have caused this Work Order to be
executed by their respective authorized representatives to be effective as of
the date last below written.

                              Artes Medical, Inc.       Therapeutics, Inc.    
 
                           
By:
              By:                                  
 
  Name:   Diane S. Goostree           Name:   Daniel Piacquadio, M.D.    
 
  Title:   President & CEO           Title:   CEO    
 
  Date:               Date:        
 
     
 
             
 
   

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EXHIBIT 1 — EXAMPLE BUDGET

                     
Client:
  ARTES   Description:   Project Work Order XXXX   TI #:   YYYYY

Project Parameters

                     
Number of Sites:
  x   Subjects per Site:   xx   Total # of Subjects:   xxx
Est. Project Duration Months:
  xx   Enrollment Period Months:   xx   Initiation Phase Months:   xx
Protocol Duration Months:
  x   Medical Monitoring Months:   xx   Closure Phase Months:   xx

                      Budget Categories   Fee Code*   Foot-Note #   Additional
Clarification   Budget ($)
A. Trial Services
                   
1. Project Management
  A       $x,xxx per month   $xx,xxx
2. Project Reporting
  A       $x,xxx per month   xx,xxx
3. Medical Monitoring
  A       $x,xxx per month   xx,xxx
4. Protocol Development and/or Review
  B,C           xx,xxx
5. CRF Review, CRF Guidelines & Source Docs
  B,C           xx,xxx
6. CRF Reproduction & Assembly
  B,E           xx,xxx
7. IRB Fees & Services
  B,E,F           xx,xxx
8. Investigator Fees
  B,D,F   (4)       xx,xxx
9. Subject Recruiting Package
  B           xx,xxx
10. Subject Advertising
  E       $x,xxx cost per site budget   xx,xxx
11. Outside Lab Fees
  B,E           xx,xxx
12. Clinical Supplies
  E           xx,xxx
13. Photography
  B,E           xx,xxx
14. Site Set-up & Close
  B   (2)       xx,xxx
15. Site Monitoring & Support
  C   (3)       xx,xxx
16. Monitoring Travel
  E           xx,xxx
 
              xx,xxx
B. Data Analysis & Final Report
              xx,xxx
1. Data Management & Statistical Analysis
  B,E           xx,xxx
2. Final Report
  B,C           xx,xxx
 
              xx,xxx
C. Other Fees
              xx,xxx
1. Project Preparation & Start Up
  B           xx,xxx
2. Senior Management Support
  C,G   (1)       xx,xxx
3. Travel (non-monitoring)
  E           xx,xxx
4. Fed-Ex & Other Delivery
  E           xx,xxx
5. Outside Consultants
  B,E,F           xx,xxx
6. TI Office Overhead
  A       $x,xxx per month   xx,xxx
7. Investigator Meetings
  C,E   (1)       xx,xxx
8. Regulatory Affairs
  C,G   (1)       xx,xxx
9. Monitor/Staff Training
  C,E   (1)       xx,xxx
10. Miscellaneous Expenses
  B,C,E   (5)       xx,xxx
 
          Total Budget:   $xxx,xxx

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A =  Fixed Monthly Fee for Actual Project Duration.   B =  Fixed Fee for Total
or Component of Project — Billable as Services are Performed.   C =  Variable
Fee: Actual Hours Incurred Times an Hourly Rate — Billable as Services are
Performed.   D = Variable Fee: Actual Cost Plus a 3.5% Administrative Processing
Fee — Billable as Costs are Incurred.   E = Variable Fee: Actual Cost Plus a 10%
Administrative Processing Fee — Billable as Costs are Incurred.   F = Billed and
Payable 60 Days in Advance of Estimated Payment Date(s) to Contractors.   (1)  
Hourly Rates: MD-$275/hour; Regulatory Affairs -$xxx/hour; VP-$xxx/hour;
Director — $xxx/hour;       Associate Director and Project Manager-$xxx/hour;
Admin. Support -$xx/hour   (2)   Includes site set-up and close fee @ $x,xxx per
site fixed   (3)   Budgeted 6 visits / site, approx. 2.25 days per visit, rate
$xxx/day, day to day site support, study file maintenance and 20% site QA
allocation   (4)   Per subject cost estimated at $x,xxx   (5)   Also includes
$x,xxx budget for study file review and archiving (at study end) billed hourly
per (1) above

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EXHIBIT 2
CHANGE ORDER FORM

                 
Change Order Number:
      Effective Date:        
Name:
  Artes Medical   Work Order Reference:        
Contact Name:
      TI Project        
 
      Identification and/or        
 
      Number(s):        
Date of revision
      Does this change the   YES   NO
request:
      overall timeline?        
Previous Budget:
  US $   Revised Budget:   US $    

Description of Modification: {Insert specific description, or attach detail and
refer to it in this section.}
AGREED TO, ACKNOWLEDGED, AND ACCEPTED BY:

                          Therapeutics, Inc.       Artes Medical, Inc.
 
                       
By:
              By:                          
 
  Name:   Daniel Piacquadio, M.D.           Name:   Diane S. Goostree
 
  Title:   CEO           Title:   President & CEO
Date:
              Date:                          

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