Document:

Exhibit 10.31

 

Exhibit 10.31

CONFIDENTIAL SETTLEMENT AGREEMENT

AND RELEASE OF ALL CLAIMS

     This Confidential Settlement Agreement and Release of All Claims (“Agreement”) is made by and
between Artes Medical, Inc.(the “Company”), a Delaware corporation and William von Brendel (“Mr.
von Brendel”).

     A. The Company terminated Mr. von Brendel’s employment on or about October 26, 2006.

     B. On or about November 16, 2006, Mr. von Brendel filed a Demand for Arbitration before the
American Arbitration Association (the “Action”), alleging wrongful termination, breach of contract,
breach of the covenant of good faith and fair dealing and fraud.

     C. The Company denies any wrongdoing and disputes the allegations of the Action.

     D. The parties desire to avoid the potential inconvenience of litigation by settling all
claims and issues that have been raised, or could have been raised, in relation to Mr. von
Brendel’s employment with the Company, the termination thereof, and arising out of or in any way
related to the acts, transactions or occurrences between Mr. von Brendel and the Company to date,
on the terms set forth below.

     THEREFORE, in consideration of the promises and mutual agreements set forth in this Agreement,
it is agreed by and between the undersigned as follows:

     1. Settlement Compensation. 

     1.1 The Company agrees to pay to Mr. von Brendel, 12 months salary totaling One Hundred
Seventy Thousand Dollars ($170,000). Mr. von Brendel will be paid in 26 pay periods as W-2 income.
Mr. von Brendel will receive gross pay each pay period in the amount of $6,538.46, less all
applicable withholdings. The operative date of such payments is October 27, 2006. The Company
will make all payments necessary to bring Mr. von Brendel’s pay current within two weeks of the
effective date of this Agreement as described in paragraph 17 below.

     1.2 The Company will pay Mr. von Brendel, as W-2 income, bonus compensation of Fifty-Six
Thousand Dollars ($56,000), less all applicable withholdings, upon the earlier of (i) the date
final bonuses are distributed to all employees and executive officers of the Company; or (ii) March
31, 2007.

     1.3 Mr. von Brendel will also be entitled to 12 months of additional stock option vesting.
Mr. von Brendel will have a total of 230,187 stock options which will fully vest on the date the
Agreement is executed by the parties. Mr. von Brendel shall have 12 months after the date the
Agreement is executed by the parties to exercise his options. This 230,187 number of shares is
based on the Company’s pre-IPO (initial public offering) stock option schedule. Thus, such shares
will be subject to the same reverse split identified in the Company’s S-1 registration filing
(1:4.25), and therefore the actual number of shares Mr. von Brendel may be granted will be

 

 

less than the 230,187 shares as shown in the schedule, attached as Exhibit A. Pricing of
options is also subject to increase to reflect the reverse split as shown on Exhibit A.

     1.4 Mr. von Brendel shall indemnify, hold harmless and defend the Company from any claims, tax
liability, interest, penalties, attorneys’ fees or costs which the Company is required to pay as a
result of Mr. von Brendel’s failure to report the Settlement Compensation described herein to the
proper taxing authorities.

     2. Dismissal of the Action. Upon executing this Agreement, Mr. von Brendel agrees to
obtain dismissal of the Action in its entirety, with prejudice, by taking all necessary steps to
secure such dismissal. 

     3. Release of Claims.

     3.1 Mr. von Brendel for himself and his heirs, agents, assigns, executors, successors and each
of them, unconditionally, irrevocably and absolutely, releases and discharges the Company and any
parent and subsidiary corporations, divisions, and affiliated corporations, partnerships or other
affiliated entities of the Company, past and present, as well as the Company’s employees, officers,
directors, agents, successors and assigns (“Releasees”), from all claims related in any way to the
transactions or occurrences between them to date, to the fullest extent permitted by law,
including, but not limited to, Mr. von Brendel’s employment with the Company, the termination of
that employment, and all other losses, liabilities, claims, charges, demands and causes of action,
known or unknown, suspected or unsuspected, arising directly or indirectly out of or in any way
connected with Mr. von Brendel’s employment with the Company. This release is intended to have the
broadest possible application and includes any and all tort, contract, common law, constitutional
or other statutory claims, including, but not limited to, alleged violations of Title VII of the
Civil Rights Act of 1964 and the California Fair Employment and Housing Act, the Americans with
Disabilities Act, and all claims for attorneys’ fees, costs and expenses. However, nothing herein
is intended to affect any vested rights Mr. von Brendel may have obtained during the course of his
employment with the Company, or affect Mr. von Brendel’s obligations to the Company pursuant to
that certain Proprietary Information and Inventions Agreement entered into between Mr. von Brendel
and the Company.

     3.2 This release does not extend to claims which, as a matter of law, cannot be waived, such
as a right to indemnification under Labor Code Section 2802.

     3.3 Mr. von Brendel and the Company declare and represent that they intend this Agreement to
be complete and not subject to any claim of mistake, and that the release herein expresses a full
and complete release and, regardless of the adequacy or inadequacy of the consideration, intend the
release to be final and complete. Mr. von Brendel executes this release with the full knowledge
that this release covers all possible claims against the Releasees to the fullest extent permitted
by law.

     4. California Civil Code Section 1542 Waiver. Mr. von Brendel expressly acknowledges
and agrees that all rights under section 1542 of the California Civil Code are expressly waived.
That statute reads as follows:

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

     5. Representation Concerning Filing of Legal Actions. Mr. von Brendel represents
that, as of the date of this Agreement, there are no pending lawsuits, charges, complaints,
petitions, claims or other accusatory pleadings against any of the Releasees in any court or with
any governmental agency, with the exception of the Action. Mr. von Brendel further agrees that, to
the fullest extent permitted by law, he will not prosecute, nor allow to be prosecuted on his
behalf, in any administrative agency, whether state or federal, or in any court, whether state or
federal, any claim or demand of any type related to the matters released herein, it being the
intention of Mr. von Brendel that with the execution of this release, Releasees will be absolutely,
unconditionally and forever discharged of and from all obligations to or on behalf of each other
related in any way to the matters discharged herein. If any action is brought, this Agreement will
constitute an affirmative defense thereto.

     6. Nondisparagement. Mr. von Brendel agrees that he will not make any voluntary
statements, written or verbal, or cause or encourage others to make any such statements that
defame, disparage or in any way criticize the reputation, business practices or conduct of the
Company or any of the other Releasees.

     7. Referral. The Company shall endeavor to direct all inquiries concerning Mr. von
Brendel to its Human Resources department. In response to inquiries, the Company will only verify
the dates of Mr. von Brendel’s employment and his job title.

     8. Reemployment. Mr. von Brendel agrees that he will not apply for employment or
otherwise request to be considered for employment with the Company or its affiliates, either in his
former capacity or in any other position or capacity. 

     9. Confidentiality.

     9.1 The parties agree that the terms and conditions of this Agreement, as well as the
discussions that led to the terms and conditions of this Agreement (collectively referred to as the
“Confidential Settlement Information”) are intended to remain confidential between Mr. von Brendel
and the Company.

     9.2 The Company may disclose the amount of the Settlement Compensation, and other terms deemed
in good faith to be strictly necessary for the conduct of its business, subject to a “need to know”
basis.

     9.3 Mr. von Brendel agrees that he will not disclose the Confidential Settlement Information
to any other person, except that Mr. von Brendel may disclose such information to his spouse, his
attorney(s) and accountant(s), if any, to the extent needed for legal advice or income tax
reporting purposes. When releasing this information to any such person, Mr. von Brendel shall
advise the person receiving the information of its confidential nature. Neither Mr.

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von Brendel nor anyone to whom the Confidential Settlement Information has been disclosed will
respond to, or in any way participate in or contribute to, any public discussion, notice or other
publicity concerning the Confidential Settlement Information.

     9.4 If Mr. von Brendel is asked about the Action by anyone other than those individuals
specifically identified in paragraph 9.3, he may respond only as follows: “The matter has been
resolved.”

     10. Liquidated Damages for Violating Confidentiality Provisions. Mr. von Brendel
understands and agrees that the confidentiality provisions of this Agreement, as set forth in
paragraph 9 above, is a material part of this Agreement. Mr. von Brendel agrees to refrain from
violating these provisions. Further, the parties understand and agree that it is difficult to
ascertain the measure of damage to the Company in the event of a breach of this provision by Mr.
von Brendel. For the foregoing reasons, if any of the provisions of paragraph 9 are breached, the
Company shall not be obligated to pay any sums remaining under the terms of this Agreement to Mr.
von Brendel, if any, and Mr. von Brendel will pay, upon proof of breach, to the Company liquidated
damages in the sum of ten thousand dollars ($10,000). In the event of Mr. von Brendel’s breach in
accordance with this provision, all other provisions of this Agreement will remain in full force
and effect.

     11. No Admissions. By entering into this Agreement, Mr. von Brendel and the Company
make no admission that they have engaged, or are now engaging, in any unlawful conduct. It is
understood that this Agreement is not an admission of liability, that there has been no trial or
adjudication of any issue of law or fact herein, and that the parties specifically deny liability
and intend merely to avoid expense by entering into this Agreement.

     12. Notice. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight
delivery service, certified mail with postage prepaid, or confirmed facsimile. Notice should be
delivered to the following addresses:

	 	 	 
	Notice to Artes Medical, Inc.:

	 	Notice to William von Brendel:
	Heller Ehrman LLP

	 	Gregory M. Garrison, Esq.
	Joseph M. Parker, Esq.

	 	Garrison & McInnis, L.L.P.
	4350 La Jolla Village Drive

	 	2650 Camino Del Rio North
	7th Floor

	 	Suite 108
	San Diego, CA 92122

	 	San Diego, CA 92108
	Fax: (858) 450-8499

	 	Fax: (619) 299-4787

     13. Entire Agreement/Modification. This Agreement is intended to be the entire
agreement between the parties and supersedes and cancels any and all other and prior agreements,
written or oral, between the parties regarding this subject matter. It is agreed that there are no
collateral agreements or representations, written or oral, regarding the settlement of claims
between the parties, other than those set forth in this Agreement. This Agreement may be amended
only by a written instrument executed by all parties hereto.

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     14. Severability. In the event any provision of this Agreement shall be found
unenforceable by an arbitrator or a court of competent jurisdiction, the provision shall be deemed
modified to the extent necessary to allow enforceability of the provision as so limited, it being
intended that the Company shall receive the benefits contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment of such arbitrator
or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability
of the remaining provisions shall not be affected thereby.

     15. Applicable Law. The validity, interpretation and performance of this Agreement
shall be construed and interpreted according to the laws of the State of California.

     16. Full Defense. This Agreement may be pled as a full and complete defense to, and
may be used as a basis for an injunction against, any action, suit or other proceeding that may be
prosecuted, instituted or attempted by Mr. von Brendel in breach hereof. The parties agree that in
the event an action or proceeding is instituted by either party in order to enforce the terms or
provisions of this Agreement, the prevailing party shall be entitled to an award of reasonable
costs and attorneys’ fees incurred in connection with enforcing this Agreement.

     17. Older Workers’ Benefit Protection Act. Mr. von Brendel acknowledges that the
Company has advised him to review this Agreement with an attorney before signing it. Mr. von
Brendel has 21 days within which to review and consider this Agreement before signing it. Should
Mr. von Brendel decide not to use the entire 21 days, Mr. von Brendel knowingly and voluntarily
waives any claim that he was not in fact given that period of time or did not use the entire 21
days to consult an attorney and/or consider this Agreement. Mr. von Brendel may revoke the
Agreement for up to seven calendar days after signing it, and this Agreement shall not become
effective or enforceable until the revocation period has passed. Any revocation of this Agreement
must be in writing addressed to and received by Human Resources on behalf of the Company no later
than 5:00 p.m. on the seventh day after Mr. von Brendel signs it. If Mr. von Brendel revokes this
Agreement, he will not receive any of the benefits described in this Agreement. This Agreement
does not waive or release any rights or claims Mr. von Brendel may have under the Age
Discrimination in Employment Act that arise after the execution of this Agreement. 

     18. Attorneys’ Fees and Costs. Both parties to this Agreement agree that they will
bear their own attorneys’ fees, costs and all other expenses in connection with the matters
released in this Agreement.

     19. Good Faith. The parties agree to do all things necessary and to execute all
further documents necessary and appropriate to carry out and effectuate the terms and purposes of
this Agreement.

     20. Counterparts. This Agreement may be executed by facsimile signature, and in
separate counterparts, each of which shall be deemed an original and all of which, when taken
together, shall constitute one and the same instrument.

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

	 	 	 	 	 	 	 
	Dated: January 9, 2007	 	/s/ William von Brendel	 	 
	 	 	 	 	 
	 	 	William von Brendel	 	 
	 
	 	 	 	 	 	 
	Dated: January 10, 2007	 	Artes Medical, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Christopher J. Reinhard	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Christopher J. Reinhard	 	 
	 
	 	 	 	 	 	 
	APPROVED AS TO FORM:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated: January 9, 2007	 	Gregory M. Garrison	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Gregory M. Garrison	 	 
	 	 	 	 	 
	 	 	Gregory M. Garrison	 	 
	 	 	Attorneys for William von Brendel	 	 
	 
	 	 	 	 	 	 
	Dated: January 9, 2007	 	HELLER EHRMAN LLP	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Joseph M. Parker	 	 
	 	 	 	 	 
	 	 	Joseph M. Parker, Esq.	 	 
	 	 	Attorneys for Artes Medical, Inc.	 	 

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Exhibit A

(Options Summary)

[Intentionally Omitted]

7Exhibit 10.32

 

Exhibit 10.32

CONFIDENTIAL SETTLEMENT AGREEMENT

AND RELEASE OF ALL CLAIMS

     This Confidential Settlement Agreement and Release of All Claims (“Agreement”) is made by and
between Artes Medical, Inc. (the “Company”), a Delaware corporation and Harald T. Schreiber (“Mr.
Schreiber”).

     A. The Company terminated Mr. Schreiber’s employment on or about October 27, 2006.

     B. On or about November 16, 2006, Mr. Schreiber filed a Demand for Arbitration before the
American Arbitration Association (the “Action”), alleging, among other things, wrongful termination
and breach of the covenant of good faith and fair dealing.

     C. The Company denies any wrongdoing and disputes the allegations of the Action.

     D. The parties desire to avoid the potential inconvenience of litigation by settling all
claims and issues that have been raised, or could have been raised, in relation to Mr. Schreiber’s
employment with the Company, the termination thereof, and arising out of or in any way related to
the acts, transactions or occurrences between Mr. Schreiber and the Company to date, on the terms
set forth below.

     THEREFORE, in consideration of the promises and mutual agreements set forth in this Agreement,
it is agreed by and between the undersigned as follows:

     1. Settlement Compensation. 

     1.1 The Company will pay Mr. Schreiber, as W-2 income, the equivalent of 14 months salary,
totaling One Hundred Ninety-Eight Thousand, Three Hundred Thirty-Three Dollars and Thirty-Three
Cents ($198,333.33), less all applicable holdings.

     1.2 The Company will pay Mr. Schreiber, as W-2 income, bonus compensation of Fifty-Six
Thousand Dollars ($56,000), less all applicable withholdings.

     1.3. The compensation referred to in paragraphs 1.1 and 1.2 will be paid to Mr. Schreiber
within three (3) business days following the Effective Date of this Agreement.

     1.4 Contingent upon this Agreement becoming effective as set forth in paragraph 18 below, the
Company agrees to amend the Stock Options which were granted as of September 15, 2004 and June 30,
2006 (“Stock Options”), such that Mr. Schreiber will be entitled to 16 months of additional stock
option vesting with respect to the Stock Options. Mr. Schreiber will have a total of 174,583 stock
options which will fully vest on the Effective Date of this Agreement as shown on Exhibit A,
attached hereto. Additionally, Mr. Schreiber shall have 12 months after the Effective Date of this
Agreement to exercise his vested options as set forth on Exhibit A. The 174,583 number of shares
is based on the Company’s pre-IPO (initial public offering) stock option schedule. Thus, such
shares will be subject to the same reverse split identified in the

 

 

Company’s S-1 registration filing (1:4.25), and therefore the actual number of shares Mr.
Schreiber may be granted will be less than the 174,583 shares as shown in the schedule, attached as
Exhibit A. Pricing of options is also subject to increase to reflect the reverse split as shown on
Exhibit A.

     1.5 Mr. Schreiber acknowledges and agrees that the extension of the period in which he may
exercise his vested Stock Options from ninety (90) to three hundred sixty-five (365) days will have
the effect of automatically converting any of the Stock Options that are currently Incentive Stock
Options (“ISO”) to Non-Qualified Stock Options (“NSO”). Mr. Schreiber further acknowledges that
ISOs and NSOs are treated differently under the tax laws. For example, upon the exercise of a
Stock Option following its conversion to an NSO, Mr. Schreiber will recognize immediate taxable
income in an amount equal to the excess of (i) the fair market value of the purchased shares at the
time of exercise over (ii) the aggregate exercise price paid for those shares. This income will be
subject to federal and state income and employment tax withholding, even though Mr. Schreiber is
not an employee of the Company at the time of exercise. As a result, when Mr. Schreiber elects to
exercise any Stock Option converted to an NSO, he will be required to deliver a check to the
Company not only for the exercise price of the purchased shares but also for the applicable
withholding taxes.

     1.6 Mr. Schreiber acknowledges that he is solely responsible for seeking his own legal and tax
advice on such matters. Mr. Schreiber further acknowledges that he must exercise his vested options
in accordance with the terms and conditions of the agreements evidencing his Stock Options, as
specifically amended herein. Mr. Schreiber acknowledges that he has read the documents evidencing
his Stock Options.

     1.7 The Company will reimburse Mr. Schreiber, within thirty (30) days of receipt of reasonable
proof of such expenses, the COBRA premium(s) paid by Mr. Schreiber on Mr. Schreiber’s behalf for a
period of twelve (12) months commencing on the date of Mr. Schreiber’s separation of employment
from the Company (the “COBRA Period”); provided Mr. Schreiber does not otherwise become eligible to
participate in another employer’s group insurance plan. If Mr. Schreiber desires to continue his
participation beyond the end of the COBRA Period, and is eligible to continue his participation
pursuant to COBRA, Mr. Schreiber agrees that he shall be fully responsible for making the necessary
premium payments in order to continue such coverage. Nothing herein shall be deemed to permit Mr.
Schreiber to continue participating in any life insurance, long-term disability benefits, or
accidental death and dismemberment plans maintained by the Company after the date of his separation
of employment from the Company. Nothing herein shall limit the right of the Company to change the
provider and/or the terms of its group health insurance plans at any time hereafter.

     1.8 Mr. Schreiber shall indemnify, hold harmless and defend the Company from any claims, tax
liability, interest, penalties, attorneys’ fees or costs which the Company is required to pay as a
result of Mr. Schreiber’s failure to report the Settlement Compensation to the proper taxing
authorities.

     2. Dismissal of the Action. Upon executing this Agreement, Mr. Schreiber agrees to
obtain dismissal of the Action in its entirety, with prejudice, by taking all necessary steps to
secure such dismissal. 

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     3. Release of Claims.

     3.1 Mr. Schreiber for himself and his heirs, agents, assigns, executors, successors and each
of them, unconditionally, irrevocably and absolutely, releases and discharges the Company and any
parent and subsidiary corporations, divisions, and affiliated corporations, partnerships or other
affiliated entities of the Company, past and present, as well as the Company’s employees, officers,
directors, agents, successors and assigns (“Releasees”), from all claims related in any way to the
transactions or occurrences between them to date, to the fullest extent permitted by law,
including, but not limited to, Mr. Schreiber’s employment with the Company, the termination of that
employment, and all other losses, liabilities, claims, charges, demands and causes of action, known
or unknown, suspected or unsuspected, arising directly or indirectly out of, or in any way
connected with Mr. Schreiber’s employment with the Company. This release is intended to have the
broadest possible application and includes any and all tort, contract, common law, constitutional
or other statutory claims, including, but not limited to, alleged violations of Title VII of the
Civil Rights Act of 1964 and the California Fair Employment and Housing Act, the Americans with
Disabilities Act, and all claims for attorneys’ fees, costs and expenses. This release does not
affect any vested rights that Mr. Schreiber may have acquired during the course of his employment
with the Company, or any other obligations owed by the parties pursuant to the Proprietary
Information and Inventions Agreement, and Indemnification Agreement, entered into between Mr.
Schreiber and the Company, copies of which are attached hereto as Exhibits B and C, respectively.

     3.2 This release does not extend to claims which, as a matter of law, cannot be waived, such
as the right to indemnification under California Labor Code Section 2802 and California Corporation
Code Section 317.

     3.3 Mr. Schreiber and the Company declare and represent that they intend this Agreement to be
complete and not subject to any claim of mistake, and that the release herein expresses a full and
complete release and, regardless of the adequacy or inadequacy of the consideration, intend the
release to be final and complete. Mr. Schreiber executes this release with the full knowledge that
this release covers all possible claims against the Releasees to the fullest extent permitted by
law.

     4. California Civil Code Section 1542 Waiver. Mr. Schreiber expressly acknowledges
and agrees that all rights under section 1542 of the California Civil Code are expressly waived.
That statute reads as follows:

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

     5. Representation Concerning Filing of Legal Actions. Mr. Schreiber represents that,
as of the date of this Agreement, there are no pending lawsuits, charges, complaints, petitions,
claims or other accusatory pleadings against any of the Releasees in any court or with any
governmental agency, with the exception of the Action. Mr. Schreiber further agrees that, to the
fullest extent permitted by law, he will not prosecute, nor allow to be prosecuted on his

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behalf, in any administrative agency, whether state or federal, or in any court, whether state
or federal, any claim or demand of any type related to the matters released herein, it being the
intention of Mr. Schreiber that with the execution of this release, Releasees will be absolutely,
unconditionally and forever discharged of and from all obligations to or on behalf of each other
related in any way to the matters discharged herein. If any action is brought, this Agreement will
constitute an affirmative defense thereto.

     6. Warrants. As of immediately prior to the Company’s completion of a 4.25-to-one
reverse split of its Common Stock on December 19, 2006, Mr. Schreiber held a warrant to purchase
42,500 shares of Common Stock at an exercise price of $1.00 per share which was fully paid, a
warrant to purchase 25,000 shares of Common Stock at an exercise price of $1.25 per share, and a
warrant to purchase 50,000 shares of Common Stock at an exercise price of $1.25 per share
(collectively, the “Warrants”). In June 2006, Mr. Schreiber elected to exercise (a) by delivery of
the exercise price in cash, the warrant to purchase 42,500 shares of Common Stock and (b) pursuant
to the “cashless exercise” provisions in the warrants, the warrants to purchase 25,000 and 50,000
shares of Common Stock, each contingent and effective upon the closing of the IPO. A copy of each
of the elections by Mr. Schreiber is attached hereto as Exhibit D-1. Mr. Schreiber acknowledges
that as a result of the elections described above, the Company’s 4.25-to-one reverse stock split
and the completion of the Company’s IPO at an initial price to the public of $6.00 per share on
December 26, 2006, Mr. Schreiber currently holds the shares of Common Stock set forth on Exhibit
D-2.

     7. Nondisparagement. Mr. Schreiber agrees that he will not make any voluntary
statements, written or verbal, or cause or encourage others to make any such statements that
defame, disparage or in any way criticize the reputation, business practices or conduct of the
Company or any of the other Releasees. The Company agrees that it will not make any voluntary
statements, written or verbal, or cause or encourage others to make any such statements that
defame, disparage or in any way criticize the reputation, business practices or conduct of Mr.
Schreiber. The parties acknowledge and agree that any statements, written or verbal, made for
purposes of complying with the rules and regulations of the SEC, the FDA, or any federal, state or
foreign governmental or regulatory agency, or any other law, shall not be deemed to be a breach of
this paragraph 7.

     8. Referral. The Company shall endeavor to direct all inquiries concerning Mr.
Schreiber to its Human Resources department. In response to inquiries, the Company will only
verify the dates of Mr. Schreiber’s employment and his job title.

     9. Reemployment. Mr. Schreiber agrees that he will not apply for employment or
otherwise request to be considered for employment with the Company, or any of its subsidiaries,
either in his former capacity or in any other position or capacity.

     10. Confidentiality.

     10.1 The parties agree that the terms and conditions of this Agreement, as well as the
discussions that led to the terms and conditions of this Agreement (collectively referred to as the
“Confidential Settlement Information”) are intended to remain confidential between Mr. Schreiber
and the Company.

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     10.2 The Company may disclose the amount of the Settlement Compensation, and other terms
deemed in good faith to be strictly necessary for the conduct of its business, subject to a “need
to know” basis.

     10.3 Mr. Schreiber agrees that he will not disclose the Confidential Settlement Information to
any other person, except that Mr. Schreiber may disclose such information to his spouse, his
attorney(s) and accountant(s), if any, to the extent needed for legal advice or income tax
reporting purposes. When releasing this information to any such person, Mr. Schreiber shall advise
the person receiving the information of its confidential nature. Neither Mr. Schreiber, nor anyone
to whom the Confidential Settlement Information has been disclosed will respond to, or in any way
participate in or contribute to, any public discussion, notice or other publicity concerning the
Confidential Settlement Information.

     10.4 If Mr. Schreiber is asked about the Action by anyone other than those individuals
specifically identified in paragraph 10.3, he may respond only as follows: “The matter has been
resolved.”

     11. Liquidated Damages for Violating Confidentiality Provisions. The parties
understand and agree that the confidentiality provisions of this Agreement, as set forth in
paragraph 10 above, are a material part of this Agreement. The parties agree to refrain from
violating these provisions. The parties understand and agree that it is difficult to ascertain the
measure of damages in the event of a breach of this provision. For the foregoing reasons, if any
of the provisions of paragraph 10 are breached, upon proof of breach, the breaching party will pay
to the non-breaching party, liquidated damages in the sum of ten thousand dollars ($10,000).
Further, in the event of a breach by Mr. Schreiber, the Company will not be obligated to pay any
sums remaining under the terms of this Agreement to Mr. Schreiber, if any. In the event of a
breach in accordance with this provision, all other provisions of this Agreement will remain in
full force and effect, except as provided herein.

     12. No Admissions. By entering into this Agreement, Mr. Schreiber and the Company
make no admission that they have engaged, or are now engaging, in any unlawful conduct. It is
understood that this Agreement is not an admission of liability, that there has been no trial or
adjudication of any issue of law or fact herein, and that the parties specifically deny liability
and intend merely to avoid expense by entering into this Agreement.

     13. Notice. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight
delivery service, certified mail with postage prepaid, or confirmed facsimile. Notice should be
delivered to the following addresses:

	 	 	 
	Notice to Artes Medical, Inc.:

	 	Notice to Harald T. Schreiber:
	Heller Ehrman LLP

	 	Law Office of Kurt W. Hallock
	Joseph M. Parker, Esq.

	 	Kurt W. Hallock, Esq.
	4350 La Jolla Village Drive

	 	110 West C. Street, Suite 1905
	San Diego, CA 92122

	 	San Diego, CA 92101
	Fax: (858) 450-8499

	 	Fax: (619) 615-0728

5

 

     14. Entire Agreement/Modification. This Agreement is intended to be the entire
agreement between the parties and supersedes and cancels any and all other and prior agreements,
written or oral, between the parties regarding this subject matter. It is agreed that there are no
collateral agreements or representations, written or oral, regarding the settlement of claims
between the parties, other than those set forth in this Agreement. This Agreement may be amended
only by a written instrument executed by all parties hereto.

     15. Severability. In the event any provision of this Agreement shall be found
unenforceable by an arbitrator or a court of competent jurisdiction, the provision shall be deemed
modified to the extent necessary to allow enforceability of the provision as so limited, it being
intended that the Company shall receive the benefits contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment of such arbitrator
or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability
of the remaining provisions shall not be affected thereby.

     16. Applicable Law. The validity, interpretation and performance of this Agreement
shall be construed and interpreted according to the laws of the State of California.

     17. Full Defense. This Agreement may be pled as a full and complete defense to, and
may be used as a basis for an injunction against, any action, suit or other proceeding that may be
prosecuted, instituted or attempted by Mr. Schreiber in breach hereof. The parties agree that in
the event an action or proceeding is instituted by either party in order to enforce the terms or
provisions of this Agreement, the prevailing party shall be entitled to an award of reasonable
costs and attorneys’ fees incurred in connection with enforcing this Agreement.

     18. Older Workers’ Benefit Protection Act. Mr. Schreiber acknowledges that the
Company has advised him to review this Agreement with an attorney before signing it. Mr. Schreiber
has 21 days within which to review and consider this Agreement before signing it. Should Mr.
Schreiber decide not to use the entire 21 days, Mr. Schreiber knowingly and voluntarily waives any
claim that he was not in fact given that period of time or did not use the entire 21 days to
consult an attorney and/or consider this Agreement. Mr. Schreiber may revoke the Agreement for up
to seven calendar days after signing it, and this Agreement shall not become effective or
enforceable until the revocation period has passed (the “Effective Date). Any revocation of this
Agreement must be in writing addressed to and received by Human Resources on behalf of the Company
no later than 5:00 p.m. on the seventh day after Mr. Schreiber signs it. If Mr. Schreiber revokes
this Agreement, he will not receive any of the benefits described in this Agreement. This
Agreement does not waive or release any rights or claims Mr. Schreiber may have under the Age
Discrimination in Employment Act that arise after the execution of this Agreement. 

     19. Attorneys’ Fees and Costs. Both parties to this Agreement agree that they will
bear their own attorneys’ fees, costs and all other expenses in connection with the matters
released in this Agreement.

     20. Good Faith. The parties agree to do all things necessary and to execute all
further documents necessary and appropriate to carry out and effectuate the terms and purposes of
this Agreement.

6

 

     21. Counterparts. This Agreement may be executed by facsimile signature, and in
separate counterparts, each of which shall be deemed an original and all of which, when taken
together, shall constitute one and the same instrument.

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

	 	 	 	 	 	 	 
	Dated: January 31, 2007

	 	/s/ Harald T. Schreiber
 

	 	 
	 

	 	Harald T. Schreiber	 	 
	 
	 	 	 	 	 	 
	Dated: January 31, 2007

	 	Artes Medical, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Diane S. Goostree
 

	 	 
	 
	 	 	 	 	 	 
	APPROVED AS TO FORM:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated: January 31, 2007

	 	Law Office of Kurt W. Hallock	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ Kurt W. Hallock	 	 
	 

	 	 

Kurt W. Hallock, Esq.
	 	 
	 

	 	Attorneys for Harald T. Schreiber	 	 
	 
	 	 	 	 	 	 
	Dated: January 31, 2007

	 	HELLER EHRMAN LLP	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ Joseph M. Parker	 	 
	 

	 	 

Joseph M. Parker, Esq.
	 	 
	 

	 	Attorneys for Artes Medical, Inc.	 	 

7

 

Exhibit A

(Options Summary)

[Intentionally Omitted]

 

 

Exhibit B

(Proprietary Information and Inventions Agreement)

[Intentionally Omitted]

 

 

Exhibit C

(Indemnification Agreement)

[Intentionally Omitted]

 

 

Exhibit D-1

(Warrant Elections)

[Intentionally Omitted]

 

 

Exhibit D-2

(Statement of Holdings)

[Intentionally Omitted]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]