Document:

EXHIBIT 10.21

 

EXHIBIT 10.21

MANUFACTURING AND SUPPLY AGREEMENT

     This Manufacturing and Supply Agreement (this “Agreement”) is made as of November 1, 2005 (the
“Effective Date”) by and between Artes Medical, Inc., a Delaware corporation located at 5870
Pacific Center Blvd., San Diego, CA 92121(the “Company”), and MediPlant GmbH Biomaterials & Medical
Devices, a corporation organized under the laws of the Germany and located at Ernst-Wiss Str. 18
D65933 Frankfurt am Main Germany (“Supplier”). Each of Company and Supplier is hereinafter
referred to as a “Party,” and are collectively referred to herein as the “Parties.”

     Whereas, Supplier is engaged in the business of manufacturing certain products that
Company seeks to use; and

     Whereas, Company desires to purchase such products from Supplier, and Supplier is
willing to supply such products to Company.

     Now, Therefore, in consideration of the foregoing premises and the mutual promises
and covenants set forth below, the Parties, intending to be legally bound, hereby agree as follows:

1. MANUFACTURE, SUPPLY AND PURCHASE OF PRODUCTS

     1.1 Agreement To Manufacture and Supply Products. Subject to the terms and conditions in this
Agreement, Supplier shall exclusively manufacture and supply to Company the products set forth on
Exhibit A hereto, as may be amended or supplemented by Company from time to time (the
“Products”), and Company shall purchase the Products from Supplier. During the Term, Supplier
shall not, to the maximum extent allowed by applicable law, supply Products to any third party.

2. SPECIFICATIONS AND STANDARDS

     2.1 Specifications. Supplier will manufacture and supply the Products to Company in
compliance with the specifications for Products set forth on Exhibit A hereto, as may be
amended or supplemented by Company from time to time (the “Product Specifications”). No changes to
the Product Specifications or manufacturing process shall be made without the prior written
approval of Company.

     2.2 Standards. Supplier will manufacture and supply the Products to Company in compliance
with all laws, regulations and quality standards governing the design, manufacture, testing,
distribution, sale or use of the Products (collectively, the “Standards”), including without
limitation current Good Manufacturing Practices (cGMP) and Quality System Regulations (QSR), as
defined in the U.S. regulations 21 C.F.R. §§ 210, 211, 600 and 610, and any other equivalent
guidelines or standards required by governmental authorities outside of the United States,
including without limitation international (ISO) and European National (EN) standards.

 

 

3. TERMS OF PURCHASE OF PRODUCTS BY COMPANY

     3.1 Purchase Orders. Company shall order Products from Supplier by submitting a written
purchase order on Company’s customary form identifying the type and quantity of Products ordered
and the requested delivery date(s); provided that each purchase order shall be submitted at least
ninety (90) days prior to the earliest delivery date requested therein and will include the current
revision of the Product Specifications. In the event that Company requests a change to a purchase
order, Supplier shall use commercially reasonable efforts to accommodate such request. Nothing
contained in any purchase order shall in any way modify any of the terms contained herein or add
any additional terms or conditions unless agreed by both Parties in writing.

     3.2 Quality Assurance. Prior to shipment, Supplier will perform all quality assurance testing
and procedures required by the Product Specifications and the Standards. At or before the date of
delivery of each shipment of Products, Supplier shall send to Company a certification that the
Products meet all requirements set for the quality assurance testing and procedures. Supplier
shall be responsible for maintaining records to support compliance with Product Specifications and
Standards.

     3.3 Shipping. All Products shall be suitably packed by Supplier for shipment and storage in
accordance with the shipping specifications set forth on Exhibit B (the “Shipping
Specifications”), the Product Specifications, the Standards and Company’s instructions. Delivery
shall be made Delivered Duty Unpaid (Incoterms 2000) at Company’s point of delivery. Supplier
shall arrange and pay for shipment of the Products using a carrier pre-approved by Company.

     3.4 Insurance. Company shall, at its own expense, provide transit insurance in commercially
reasonable amounts to insure against any potential losses incurred in transit during the shipment
of the Products.

     3.5 Acceptance. If Company, in its reasonable discretion, determines that any Products in a
shipment do not meet the Product Specifications or the Standards, Company will have the right to
reject the nonconforming part or the entire shipment (a “Rejectable Shipment”) upon notice to
Supplier. Supplier shall replace the rejected defective Products within sixty (60) days after
receipt of notice thereof.

     3.6 Supply Failure. Company, upon written notice to Supplier, will have the right to source
the manufacture and supply of any or all of Company’s requirements for the Products to another
supplier or manufacture Products itself in the event that (each of which is referred to herein as a
“Supply Failure”):

          (a) Any shipment of Products was received *** or more days late;

          (b) *** or more shipments of Products were each received *** or more days late
within any 12-month period of this Agreement;

 

			
	***	 	Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the
Commission.

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          (c) *** or more Rejectable Shipments were received within any 12-month period of this
Agreement; or

          (d) Supplier rejected any orders for Products (regardless of Supplier’s reasons), provided
such orders were otherwise in compliance with the terms hereof.

In the event that Company exercises its right to manufacture Products or have Products
manufactured, Supplier shall (i) grant to Company a non-exclusive license with the right to
sublicense under any patent, know-how, trade secrets or technical and other information relating to
the manufacture of Products owned by or licensed to Supplier solely to make and have made Products;
(ii) provide a copy of all data and other information generated during the manufacture of Products
hereunder that is reasonably necessary to permit Company to make or have made Products and (iii)
provide the requisite training and instruction to Company’s personnel to enable them to manufacture
Company’s requirements of Product in accordance with the Specifications and Standards.

4. PRICE AND PAYMENT

     4.1 Price. The initial price to be paid by Company for each Product is set forth on
Exhibit A. The prices for the Products shall be subject to adjustment on the first day of
each fiscal quarter and shall be determined based on Supplier’s actual documented production costs
in accordance with U.S. Generally Accepted Accounting Principles, plus a *** percent (***%)
manufacturing profit. Payments shall be made within sixty (60) days after Supplier’s written
invoice therefore; provided that Company shall not be required to pay Supplier more than one time
over any 60-day period.

     4.2 Payment.

          (a) Company will make payment to Supplier under this Agreement by wire transfer to a bank
account designated by Supplier. All payments due under this Agreement will be paid in U.S.
Dollars.

          (b) The rate of exchange to be used in computing the amount of currency equivalent in U.S.
Dollars due Supplier hereunder shall be made at the current exchange rate determined by Company’s
bank at the time of payment.

          (c) Any withholding of taxes levied by tax authorities on the payments hereunder shall be
borne by Supplier and deducted by Company from the sums otherwise payable by it hereunder for
payment to the proper tax authorities on behalf of Supplier. Company agrees to cooperate with
Supplier in the event that Supplier claims exemption from such withholding or seeks deductions
under any double taxation or other similar treaty or agreement from time to time in force, such
cooperation to consist of providing receipts of payment of such withheld tax or other documents
reasonably available to Company.

 

			
	***	 	Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the
Commission.

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5. PRODUCT WARRANTIES

     5.1 Product Warranty. Supplier warrants to Company, and for the benefit of its customers,
that:

          (a) All of the Products supplied and delivered to Company pursuant to this Agreement:

               (i) shall meet all Product Specifications and shall be free from contaminants at the time of
delivery and will have been manufactured in compliance with the Product Specifications;

               (ii) will have been manufactured pursuant to all applicable law, rules and regulations,
including those in Germany and the United States, and in accordance with the Standards, including
applicable cGMP, QSR and ISO requirements; and

               (iii) will have been free from defects in materials and workmanship; and

          (b) The records maintained by Supplier will accurately reflect the processes and procedures
followed by it in manufacturing the Products.

6. INSPECTION AND RECORDS

     6.1 Right to Inspect. Company, at its sole expense, will have reasonable access to:

          (a) observe and inspect Supplier’s manufacturing facilities and procedures, including all
analytical and manufacturing documentation related to the manufacture and supply of the Products
pursuant to this Agreement, with a minimum of at least one annual full inspection (but less
intrusive visits on an as-needed basis), upon reasonable notice to Supplier; and

          (b) audit Supplier for compliance with cGMP, QSR and ISO, other than “for cause” audits, which
Company shall be entitled to conduct following the implementation of measures in response to
inspection observations or similar reports delivered by government authorities pertaining to the
manufacture of Products or which are reasonably likely to adversely affect the manufacture of
Products. Audits will be scheduled at mutually agreeable times upon at least seven (7) days’
advance written notice to Supplier.

     6.2 Records. Supplier shall maintain true and accurate books, records, test and laboratory
data, reports and all other information relating to the manufacture of the Products under this
Agreement. Such information shall be maintained in forms, notebooks and records for a period of at
least five (5) years after the termination of this Agreement, or longer if required under
applicable laws.

     6.3 Visits by Governmental Agencies. Supplier shall advise Company within three (3) business
days if an agent of any governmental agency visits a facility where manufacturing activity with
respect to Products takes place, where the interest of the governmental agency is

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specifically related to manufacturing activity with respect to Products or is reasonably
likely to affect the production of Products. In such circumstance, Supplier shall furnish to
Company a copy of sections of the report by such governmental agency that are specifically related
to the Product or which are reasonably likely to adversely impact the production of Product, if
any, within ten (10) days of receipt of such report. Further, upon receipt of a governmental
agency written request to inspect a manufacturing facility where manufacturing activity with
respect to Product takes place or to audit Supplier’s books and records, Supplier shall notify
Company thereof within three (3) business days, and shall provide Company with a copy of the
written request. Supplier shall provide Company with notice of any non-written inspection request
from a governmental agency as promptly as reasonably practicable under the circumstances. Supplier
shall provide to Company such notice as is reasonably practicable under the circumstances of any
action by a governmental agency resulting from an inspection of a facility where manufacturing
activity with respect to Product takes place regarding the manufacture of Product or which is
reasonably anticipated to affect Supplier’s ability to perform its obligations under this
Agreement.

7. INTELLECTUAL PROPERTY RIGHTS

     7.1 No Rights to Company Technology. Supplier shall not, by virtue of this Agreement, have
any right, title, license or interest in or to any and all materials, technical and other
information, including the Specifications, relating to the Products or the manufacture thereof or
to which Company has intellectual property rights, including but not limited to patent rights,
trade secret rights, know-how and copyrights, whether arising in the United States, Germany or any
other jurisdiction or treaty regime, or which Company is otherwise authorized to use, or any other
intellectual property rights relating thereto (all the foregoing collectively are “IP Rights”).

     7.2 Inventions. Title to all inventions (whether or not patentable), discoveries,
developments, improvements, trade secrets and know-how (collectively, “Inventions”) conceived or
reduced to practice in connection with the development or manufacture of Products hereunder shall
be owned solely by Company. Supplier shall promptly notify Company in writing of any Inventions.
Supplier shall cooperate with Company and shall execute, and cause its employees, agents and
representatives to execute, any and all instruments or other documents necessary or reasonably
requested by Company in order to vest title to all Inventions and all IP Rights in Company. Any
Inventions that are new models of or improvements or enhancements to the Products shall be
considered “Products” hereunder.

8. CONFIDENTIAL INFORMATION

     8.1 Confidential Information. Company and Supplier acknowledge and agree that all
documentation (other than advertising promotional materials and user information) and confidential
business information, in whatever form or media, disclosed by one party (the “Disclosing Party”) to
or known by the other party (the “Recipient”) orally or in writing as a consequence of or through
Recipient’s relationship with the Disclosing Party including, without limitation, information
concerning the Disclosing Party’s products, finances, processes and services, test results,
technology and technical information, accounting, manufacturing, distribution and marketing
(“Information”), shall remain the sole and exclusive property of the

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Disclosing Party, shall be held in strict confidence by the Recipient, and shall not be
published, disclosed, disseminated or used by the Recipient in any manner, except as expressly
permitted hereunder. Recipient may not reproduce or copy the Information, in whole or in part, and
must return or destroy the Information upon the expiration or termination of this Agreement. In
addition, Recipient shall safeguard such Information and ensure that only employees, officers and
directors who need access to the Information for purposes of performing Recipient’s obligations
under this Agreement will be given such access and all such employees, officers and directors will
comply with the confidentiality and non-use obligations set forth herein. Notwithstanding the
foregoing, Recipient’s obligations under this Section 8 shall not apply to the extent any
information (i) is now or subsequently becomes generally available o the public through no wrongful
act or omission of the Recipient, (ii) the Recipient can demonstrate by written records to have had
rightfully in its possession prior to disclosure to the Recipient, (iii) is independently developed
by the Recipient without use, directly or indirectly, of any Information, as evidenced by written
records, or (iv) Recipient rightfully obtains from a third party who has the right to transfer or
disclose it. In the event the Recipient is required to disclose any Information pursuant to
applicable law or governmental regulation, the Recipient shall promptly notify the Disclosing Party
in order to allow the Disclosing Party the maximum time to obtain protective or confidential
treatment of the Information prior to disclosure.

9. TERM AND TERMINATION

     9.1 Term. The term of this Agreement will commence on the Effective Date and will continue in
force until terminated pursuant to Section 9.2, 9.3 or 9.4 (the “Term”).

     9.2 Termination For Cause. Either Party shall have the right to terminate this Agreement upon
written notice if the other Party materially breaches this Agreement and fails to cure such breach
within thirty (30) days after notice thereof from such Party.

     9.3 Termination For Supply Failure. Company shall have the right to terminate this Agreement
upon 30 days’ written notice in the event of a Supply Failure.

     9.4 Termination For Convenience. Company may terminate this Agreement for convenience at any
time upon ninety (90) days’ prior written notice of termination to Supplier.

     9.5 Effect Of Termination. Expiration or termination of this Agreement for any reason will
not release any party hereto from any liability which, at the time of such termination, has already
accrued to the other party or which is attributable to a period prior to such termination nor
preclude either party from pursuing any rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.

10. GENERAL PROVISIONS

     10.1 Expenses. Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the preparation, execution,
and performance of this Agreement and the transactions contemplated hereunder, including all fees
and expenses of agents, representatives and counsel.

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     10.2 Notices. Notices required under this Agreement will be deemed effective when received
and will be sent by courier or fax to the following addresses:

	 	 	 
	To the Company:

	 	Artes Medical, Inc.
	 

	 	5870 Pacific Center Boulevard
	 

	 	San Diego, California 92121
	 

	 	U.S.A.
	 

	 	Attn: Peter C. Wulff, Chief Financial Officer
	 
	 	 
	To Supplier:

	 	MediPlant GmbH Biomaterials & Medical Devices
	 

	 	Ernst-Wiss Str. 18
	 

	 	D65933 Frankfurt am Main Germany
	 

	 	Attn: Juerg Tschopp, Managing Director

     10.3 Force Majeure. Neither party will lose any rights hereunder or be liable to the other
party for damages or losses (except for payment obligations) on account of failure of performance
by the defaulting party if the failure is occasioned by war, strike, fire, Act of God, earthquake,
flood, lockout, embargo, governmental acts or orders or restrictions, or any other reason where
failure to perform is beyond the reasonable control and not caused by the negligence, intentional
conduct or misconduct of the nonperforming party and such party has exerted all reasonable efforts
to avoid or remedy such event of force majeure; provided, however, that in no event will a party be
required to settle any labor dispute or disturbance.

     10.4 Advice Of Counsel. Supplier and Company have each consulted counsel of their choice
regarding this Agreement, and each acknowledges and agrees that this Agreement will not be
construed by virtue of its drafting against either party.

     10.5 Further Assurances. The parties will cooperate reasonably with each other and with their
respective representatives in connection with any steps required to be taken as part of their
respective obligations under this Agreement, and the parties agree, at the expense of requesting
party, (a) to furnish upon request to each other such further information, (b) to execute and
deliver to each other such other documents, and (c) to do such other acts and things, all as the
other party may reasonably request for the purpose of carrying out the intent of this Agreement and
the transactions contemplated hereunder.

     10.6 Independent Contractors. The relationship of Company and Supplier established by this
Agreement is that of independent contractors, and nothing contained in this Agreement will be
construed to (a) give either party the power to direct and control the day-to-day activities of the
other, (b) constitute the parties as partners, joint venturers, co-owners or otherwise as
participants in a joint venture or common undertaking, or (c) allow either party to create or
assume any obligation on behalf of the other for any purpose whatsoever. All financial and other
obligations associated with either party’s business are the sole responsibility of the party.

     10.7 Severability And Waiver. In the event that any provisions of this Agreement are
determined to be invalid or unenforceable by a court of competent jurisdiction, the remainder of
the Agreement will remain in full force and effect without said provision. The failure of a party

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to enforce any provision of the Agreement will not be construed to be a waiver of the right of
such party to thereafter enforce that provision or any other provision or right.

     10.8 Succession And Assignment. This Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns. No party may assign
either this Agreement or any of its rights, interests or obligations hereunder without the prior
written consent of the other parties, provided that either may assign pursuant to a merger,
consolidation or sale of all or substantially all its assets.

     10.9 Governing Law. This Agreement will be governed by and construed solely and exclusively
under the laws of the State of California, U.S.A., without giving effect to any law which would
result in the application of a different body of law. The Parties hereby agree that the United
Nations Convention on Contracts for the International Sale of Goods does not apply to this
Agreement.

     10.10 Dispute Resolution.

          (a) In the event of any dispute between the Parties arising out of or otherwise relating to
this Agreement, the Parties agree to attempt to amicably resolve such dispute within ten (10) days
of one Party’s receipt of written notice of such dispute from the other Party (the “Notice”). If
such dispute is not resolved by the parties within fourteen (14) days following the date of such
Notice (the “Informal Resolution Period”), the dispute shall be escalated to the senior management
of each Party for resolution. Any and all disputes that are not resolved by such management
escalation within ten (10) days following the expiration of the Informal Resolution Period, shall
be resolved as set forth in Section 10.10(b); and

          (b) Any and all disputes hereunder which are not resolved between the Parties under Section
10.10(a) shall be brought and resolved solely and exclusively in, and the parties hereby
irrevocably consent to the exclusive jurisdiction and proper venue of, the state and federal courts
located in San Diego County, California, U.S.A., and waive any objections thereto based on any
ground including improper venue or forum non-conveniens. Any decision rendered by such a court
shall be binding, final and conclusive upon the Parties, and a judgment thereon may be entered in,
and enforced by, any court having jurisdiction over the Party against which an award is entered or
the location of such Party’s assets.

     10.11 Counterparts. This Agreement has been executed in English, which shall control for all
purposes, and may be executed in one or more counterparts. The exchange of copies of this
Agreement and of signature pages by facsimile transmission will constitute effective execution and
delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for
all purposes. Signatures of the parties transmitted by facsimile will be deemed to be their
original signatures for all purposes.

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     In Witness Whereof, the parties have executed and delivered this Agreement as of the
date indicated in the first sentence of this Agreement.

	 	 	 	 	 
	The Company:	 	Artes Medical, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Peter Wulff
	 

	 	 	 	 
	 

	 	 	 	Peter C. Wulff
	 

	 	 	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	MediPlant Biomaterials & Medical Devices GmbH
	 
	 	 	 	 
	 

	 	By
	 	/s/ Juerg Tschopp
	 

	 	 	 	 
	 

	 	 	 	Juerg Tschopp

Managing Director

[SIGNATURE PAGE TO MANUFACTURING AND SUPPLY AGREEMENT]

 

 

EXHIBIT A

Product Specification & Pricing

Specification

	 	•	 	Chemical Formula: (C5O2H8)n
	 
	 	•	 	Density: 1.17 to 1.20 grams/cc
	 
	 	•	 	Appearance: White spherical granules.
	 
	 	•	 	Shipping Temperature: Not to exceed 2-25oC verified by HOBO data loggers
	 
	 	•	 	Packaging requirements: 50 grams + 5 grams of PMMA will be packaged in a
dual, sterile, polyethylene bags. The bags will be placed in a sealed container to
adequately protect sterile barrier and product during shipping. Shipping container to
include HOBO data loggers.
	 
	 	•	 	Surfactant: Tween 80, <0.1%
	 
	 	•	 	Size Distribution of Microsperes: NMT 1% < 20 microns > 60 microns
	 
	 	•	 	Documents required with shipment – Certificate of Analysis
	 
	 	•	 	Sterilization Requirement – ETO Sterilized

Manufacturer

	 	•	 	Mediplant GmbH – AM 1002 (custom material manufactured exclusively for Artes Medical, Inc.)

Material Specifications Responsibilities

	 	•	 	Material Specifications are determined and approved by Artes Medical Inc.

Supplier Responsibilities

	 	•	 	Mediplant GmbH is responsible to manufacture, document and certify the sterile PMMA
material. Any changes to the specifications will be approved by Artes Medical.
	 
	 	•	 	Mediplant GmbH is responsible to program all HOBO Temperature Data Loggers that will
be placed on each shipment. Artes Medical will supply, maintain, and calibrate all
HOBO Temperature Data Loggers supplied to Mediplant GmbH.
	 
	 	•	 	Mediplant GmbH is responsible to ensure HOBO Temperature Data Loggers are within
calibration prior to use.
	 
	 	•	 	Mediplant GmbH is responsible for maintaining certificate of analysis documentation
and any applicable test report data per the Mediplant GmbH quality system and is to
notify Artes Medical of any significant changes or deviations.

Expiration Date

	 	•	 	Assign Artes medical expiration date as “2 years from the date of sterilization”.

Pricing

	 	•	 	$*** USD / gram per section 4

 

			
	***	 	Portions of this page have been omitted
pursuant to a request for Confidential Treatment filed separately with the
Commission.

 

 

EXHIBIT B

Product Shipping Specifications & Shipping Carrier Requirements

Shipping & Packaging Specifications

	 	•	 	Shipping temperature requirements: 2 o C to 25 o C
	 
	 	•	 	Packaging: 50 grams PMMA microspheres per sealed and double pouched polyethylene pouch
	 
	 	•	 	One (1) pouch of product per will be packaged per individual compartment, with up to
a total of 36 pouches placed within the inner shipping box ( see picture below).
	 
	 	•	 	Two (2) calibrated HOBO data loggers will be placed inside compartments of opposing
corners of inner shipping box.
	 
	 	•	 	The inner shipping box will be sealed and placed inside an outer corrugated shipping
box lined (all six interior sides) with 2 inch polyurethane insulation material
followed by sealing of the outer shipping box
	 
	 	•	 	One final shipping container with finished product will be shipped per shipment

Shipping Carrier Requirements

	 	•	 	The shipping carrier selected must have refrigeration and shipping temperature
monitoring capabilities from initial pickup (MediPlant GmbH) to final destination
(Artes Medical, Inc.)

	 	 	 	 	 
	 

	 	[Picture]
	 	Inner
	 

	 	 	 	Shipping
	 

	 	 	 	BoxEXHIBIT 10.22

 

EXHIBIT 10.22

FIXED PRICE SUPPLY AGREEMENT 

     Under terms of this Fixed Price Supply Agreement (“Agreement”), ARTES MEDICAL INC., with a
place of business located at 5870 Pacific Center Blvd. San Diego, CA 92121 (“Buyer”) agrees to buy
and LAMPIRE BIOLOGICAL LABS, INC., with its place of business located at 3599 Farm School Road,
Ottsville, Pennsylvania 18942 (“Seller”) agrees to sell Bovine Corium (“Material”) pursuant to the
prices and terms set forth hereunder.

	1.	 	PURCHASE OF MATERIAL

     On the terms and subject to the conditions hereinafter set forth, Seller shall process
Material for the Buyer, in accordance with Attachment 1 and pursuant to a written Purchase Order
submitted by Buyer for not less than the minimum quantity of Material and Material processing
depicted in Paragraph 2 hereunder.

     By way of example, and not by way of limitation, ten (10) cows shall yield approximately
thirty (30) kilograms of Material).

	2.	 	PURCHASE PRICE AND TERMS

     Price for the Material shall be as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Service
Rendered
	 	Units	 	Unit Price	 	Extension
	Animal Acquisition
	 	 	***	 	 	$	*	**	 	$	*	**
	Animal Processing
	 	1 Lot (*** Hides)	 	$	*	**	 	$	*	**
	Total Fixed Price
	 	 	 	 	 	 	 	 	 	$	*	**

     The Seller will invoice the Buyer for the Animal Acquisition fee, due Net ***, at the time the
animals are acquired by the Seller. The Seller will invoice the Buyer for the balance of Total
Fixed Price for Materials provided. Cash terms are net  ***  days, F.O.B. Coopersburg, PA,
freight prepaid and added to the invoice.

3. PROCESSING REQUIREMENTS

     Seller shall process Materials in strict accordance with requirements set forth in Attachment
1 (General Process Requirements) and Artes Medical Part Specification 1001. The parties may modify
the processing requirements for any Materials at any time, and they may agree upon additional
processing requirements for new Materials, provided however, that no processing requirements,
modifications or additional shall become effective and binding upon the parties until they have
been agreed upon in writing and signed by both parties as a part of this Agreement.

4. NO RECOURSE

     It is agreed and understood between the parties that the purchase commitment, represented by a
Purchase Order for Materials in an amount not less than the amounts depicted in Paragraph 2 above
represents a firm obligation on behalf of the Buyer and shall, for the purposes of this Agreement,
be considered “take or pay.”

 

			
	***	 	Portions of this page have been omitted
pursuant to a request for Confidential Treatment filed separately with the
Commission.

Page 1

 

 

5. DELIVERY / SHIPMENTS OF THE MATERIALS BY THE SELLER

     Seller shall exercise its best efforts to deliver the Material within ***months of
receipt of a Purchase Order. Seller shall create and maintain a documented shipping procedure
approved by Artes Medical. Seller will provide documentation with each shipment as set per Artes
Specification 1001.

6. ORDER OF PRECEDENCE

     It is specifically understood between Buyer and Seller that any conflict that may arise
between the terms of this Agreement and the terms of any Purchase Order including, without
limitation, any general terms and conditions which may be included as part of any Purchase Order,
shall be resolved by having this Agreement take precedence.

7. WARRANTY

     Seller makes no warranty expressed or implied, including any warranty of merchantability or
fitness for any particular purpose, concerning the Material, other than, the Material shall be (i)
of the quality specified in Attachment 1; and (ii) be manufactured pursuant to generally accepted
industry standards, in accordance with applicable laws, rules and regulations and the Buyer’s
manufacturing procedures (hereinafter “Manufacturing Procedures”) specified in Attachment 2.

8. HOLD HARMLESS, INDEMNIFICATION

     Buyer shall protect, defend, and indemnify Seller and its respective officers, directors,
employees and agents harmless against any and all claims, losses, demands, causes of action and any
and all related costs and expenses including, but not limited to reasonable attorneys’ fees, costs
and expenses suffered by Seller and/or Seller’s officers, directors, employees, agents and to the
person or property of any other person or entity on account of personal injuries or death, or
damage to property occurring, growing out of, incident to, or resulting directly or indirectly from
the use of Material. The foregoing indemnification shall not be of effect when such loss, damage,
injury or liability arises from or in connection with Seller’s breach of this Agreement or the
gross negligence or willful misconduct of Seller, its employees, agents, subcontractors,
consultants or temporary contractors; or where such loss, damage, injury or liability is due to
imperfections of any Material or information furnished by Seller.

9. INSURANCE

     Each party shall maintain at all times during the Term adequate insurance protecting all the
Materials while in the party’s control, and in Buyer’s case while in transit from the Seller, from
any loss casualty, or damage. Buyer shall maintain product liability insurance resulting from use
of the Materials. All insurance shall be in amounts not less that
$***  per occurrence and $***  in the aggregate. Buyer shall cause Seller to be named as an “Additional Insured” on all
policies of insurance. Any failure by Seller to obtain proof of “additional Insured” status shall
not be deemed waiver of such requirement. Each party
shall direct its insurer to notify the other in writing immediately upon receipt from that
party of, or upon the respective insurer’s giving to that party, any notice relating to the non
renew cancellation or reduction in coverage of such insurance.

 

			
	***	 	Portions of this page have been omitted
pursuant to a request for Confidential Treatment filed separately with the
Commission.

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10. CONFIDENTIALITY

     (a) All written information which is identified as confidential and is provided by
one party to the other in connection with this Agreement, including both specific and business
information, shall be retained in confidence by the party receiving such information, and the
receiving party shall not disclose such information and shall not use such information for its
benefit or for the benefit of any third party, except as necessary to perform or enforce this
Agreement without the express written consent of the other party. Such obligations of
confidentiality and non-use shall not apply to information: (i) which is known to such receiving
party at the time of disclosure; (ii) which is hereafter disclosed to such receiving party by a
third party who, as against the party furnishing the information, has the right to disclose the
information; or (iii) which is available to the public or the trade or subsequently becomes
available to the public or trade through no fault of the receiving party.

     (b) The receiving party may disclose confidential information in connection with any
court proceeding or governmental investigation where such disclosure is legally required and in
connection with applications to the government for approval to sell or continue the sale of
product(s) comprising the Material; provided the disclosing party shall take all reasonable steps
to preserve the confidential information and notice as such disclosure is given the other party.

     (c) The stipulations of confidentiality described herein shall survive the
termination of this agreement for a period of
***  years.

11. TERMINATION

     (a) This Agreement will commence on the date executed by Buyer (provided the
Agreement is also executed by Seller) and will continue for an initial term of one (1) year from
such date (the “Initial Term”). After the Initial Term, this Agreement shall be renewed
automatically for successive one (1) year periods (each, a “Renewal Term”) unless Buyer or Seller
provides written notice to the other party, at least sixty (60) days prior to the end of the
Initial Term or any Renewal Term, as applicable, that the Agreement shall not be renewed.

     (b) This Agreement may be terminated in writing at any time during the Term, if
either party breaches this Agreement and fails to cure such breach
within   ***   days of the date
of the non-breaching party’s written breach notice to the breaching party; except that, the
non-breaching party shall be entitled to immediate termination on written notice if the breaching
party breaches a provision that is incapable of cure.

12. MISCELLANEOUS

     (a) Amendments:

     This Agreement may not be amended or modified, nor may any right or remedy of either party be
waived, unless the same is in writing and signed by the duly authorized representative of such
party. The waiver by either party of the breach of any term or provision hereof by the other party
shall not be construed as a waiver of any other or subsequent breach.

     (b) No Waiver; Remedies:

     No failure or delay by either party in exercising any of its rights or remedies herein shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy
preclude any other or

 

			
	***	 	Portions of this page have been omitted
pursuant to a request for Confidential Treatment filed separately with the
Commission.

Page 3

 

 

further exercise thereof or the exercise of any other right or remedy. The
rights and remedies of the parties provided in this Agreement are cumulative and not exclusive of
any rights or remedies provided by law.

     (c) Force Majeure:

     Either party shall be excused from nonperformance or delay in performance to the extent that
such nonperformance or delay in performance is caused by circumstances beyond the control of the
affected party. Without limitation, the term “Force Majeure” shall include promulgation of United
States’ governmental regulations under the Federal Food, Drug and Cosmetic Act and/or the United
States Department of Agriculture which affect either Buyer’s use of the Material or Seller’s
ability to produce the Material.

     (d) Successors and Assigns:

     This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided that neither party hereto may assign or
otherwise transfer any of its rights, duties or obligations under this Agreement without the prior
written consent of the other party, which shall not be unreasonably withheld or delayed by either
party.

     (e) Entire Agreement:

     This Agreement constitutes the sole, final and entire expression of the terms of Agreement
between the parties relating to the subject matter contained herein and is the complete and
exclusive statements of those terms. This Agreement supersedes all prior proposals,
communications, representations and agreements, whether oral or written, with respect to such
subject matter hereof. All references to this Agreement shall be deemed to include the schedules
hereto. No provision in any purchase order or purchase order confirmation, whether entered into
prior to, concurrently with or after the execution and delivery of this Agreement, shall be
effective to the extent that provision is inconsistent with any provision of this Agreement.

     (f) Severability:

     Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions hereof in any other
jurisdiction.

     (g) Notices:

     All notices provided for this Agreement shall be sent by registered or certified mail, return
receipt requested and be deemed given on delivery as confirmed by delivery records, to the parties
at the addresses indicated in the initial paragraph of this Agreement, unless either party changes
address by written notice to the other.

     (h) Relationship:

     Each part to this Agreement is an independent contractor, and nothing contained herein shall
be construed to create an agency, employment, representative relationship or partnership between
the parties.

Page 4

 

 

     (i) Headings:

     All headings, sub-headings and captions in this Agreement have been inserted merely for the
convenience of the parties and shall have no effect on the interpretation of this Agreement.

     (j) Governing Law / Cost of Enforcement:

          (1) This Agreement, including the performance and enforceability hereof, shall be
governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without
giving effect to any law which would result in the application of a different body of law. Any and
all disputes arising under or in connection with this Agreement shall be brought and resolved in
the state or Federal courts located in the Commonwealth of Pennsylvania and each party hereby
consents to the jurisdiction of such courts and waives any objections thereto.

          (2) All reasonable and customary attorney’s fees of both plaintiff and defendant
shall be borne by the unsuccessful litigant.

     Entered into this 1st day of March, 2006

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	LAMPIRE BIOLOGICAL LABS, INC.	 	               ARTES MEDICAL. INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gregory F. Krug
	 	By:
	 	/s/ Peter Wulff	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	      Gregory F. Krug
	 	 	 	      Peter C. Wulff	 	 
	 

	 	      President
	 	 	 	      Chief Financial Officer	 	 

APPROVED AS TO FORM

/s/ K. Kelly

Legal Dept., Artes Medical, Inc.

Dated: 03/1/06

Page 5

 

 

Attachment 1 — General Process Requirements

	1.0	 	General Information

	 	1.1	 	All information regarding the specific requirements for Lampire Biological
Laboratories to prepare, produce, and/or deliver the Material shall be governed by the
specification of Artes Medical part # 1001.
	 
	 	1.2	 	The hide splitter blade is dedicated to Artes Medical Materials only.
	 
	 	1.3	 	Lampire Biological Laboratories completes, approves, and maintains the
following certificates:

	 	1.3.1	 	Certificate of Conformance
	 
	 	1.3.2	 	Veterinary Inspection Certificate, signed by the Safety Officer of
the approved Abattoir
	 
	 	1.3.3	 	 Calf Hide Collection, Transport and Processing
	 
	 	1.3.4	 	Calf Hide Collection, Transport and Processing

	2.0	 	Lampire Biological Laboratories Responsibilities

	 	2.1	 	Lampire Biological Laboratories is required to notify and receive approval
from Artes Medical, Inc. in advance of any proposed changes in breeding, feeding,
growing, slaughtering or processing of the calf and calf hide corium.
	 
	 	2.2	 	Lampire Biological Laboratories is responsible for the shipment of corium to
Artes Medical, Inc. via couriers with package tracking capabilities.
	 
	 	2.3	 	Lampire Biological Laboratories is required to document and report all
deviations or non-conformances of calves, hides, corium or shipments.
	 
	 	2.4	 	Lampire Biological Laboratories is required to maintain historical processing
documents, on site, for all herds processed on behalf of Artes Medical. In the event
Lampire Biological Laboratories decides to dispose of Artes Medical related processing
documents, hard copies will be sent to Artes Medical’s Quality Department.

	3.0	 	Breeder Farms

	 	3.1	 	The breeder farm(s) must be an approved supplier of Artes Medical, Inc.
	 
	 	3.2	 	The farms must follow CFR 589.2000, “Animal Proteins Prohibited in Ruminant Feed.”
	 
	 	3.3	 	The breeder farm location has not been involved in a confirmed case of BSE.

	4.0	 	Grower Farms

	 	4.1	 	The grower farm(s) must be inspected by an Artes Medical Representative prior
to placement of animals.
	 
	 	4.2	 	The farms must follow Marcho Farms growing practices and CFR 589.2000, “Animal
Proteins Prohibited in Ruminant Feed.”
	 
	 	4.3	 	The grower farm location has not been involved in a confirmed case of BSE.
	 
	 	4.4	 	Calf growing must occur in the continental U.S.

	5.0	 	Abattoir -Marcho Farms

	 	5.1	 	Slaughtering Requirements:

	 	5.1.1	 	Calves are required to be slaughtered at a USDA approved and
supervised abattoir.
	 
	 	5.1.2	 	Marcho Farms has not been involved in a confirmed case of BSE.
	 
	 	5.1.3	 	Calves are required to be healthy and undergo ante mortem inspection
within 24 hours prior to slaughtering.
	 
	 	5.1.4	 	Calves are required to be stunned via mushroom stunner, with no
intracranial penetration.
	 
	 	5.1.5	 	Calf hides are required to be removed before the animal carcass is
opened to avoid contamination.

Page 6

 

Attachment 2  —  Manufacturing Procedures

Lampire Biological Laboratories Document Number & Description

	 	•	 	QA 200 52 Bovine Source Material Certification Documentation
	 
	 	•	 	BR 160 96 Collection, Transport, Processing and Shipment of Bovine Calf Hides
and Corium (Artes Medical, Inc., P/N 1001)
	 
	 	•	 	SP 140 87 Operation and Maintenance of the SC/L 1500 Bovine Hide Fleshing
Machine
	 
	 	•	 	SP 140 94 Operation and Maintenance of the Fortuna Hide Splitting Machine
	 
	 	•	 	SP 140 96 Bovine Hide Processing area Preparation Log
	 
	 	•	 	SP 160 116 Packaging and Shipment of Bovine Calf Hides and Corium (Artes
Medical, Inc., P/N 1001)

Page 7

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