exv10w38



 





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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