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exv10w23

 

EXHIBIT 10.23

Termination and General Release

     This Termination Agreement and General Release (this “Agreement”) is made and given by
Gottfried Lemperle, M.D. (the “Professor Lemperle”) and Artes Medical, Inc. (the
“Company”), effective as of May 11, 2006 (the “Effective Date”), and inures to the
benefit of each of the Company’s current, former and future parents, subsidiaries, related
entities, employee benefit plans and each of their respective fiduciaries, predecessors,
successors, officers, directors, stockholders, attorneys, agents, employees and assigns.

RECITALS

     A. Professor Lemperle was for a period of time an employee of the Company, including serving
most recently as the Company’s Chief Scientific Officer.

     B. In connection with the Professor Lemperle’s retirement from the Company, the Company and
Professor Lemperle entered into a Separation Agreement, dated March 16, 2006 (the “Separation
Agreement”), that provides for the Professor Lemperle to continue to provide consulting services to
the Company for up to twenty-four (24) months from the Retirement Date as defined in the Separation
Agreement.

     C. Pursuant to Section 10.3 of the Separation Agreement, the Company has determined to
terminate Professor Lemperle’s consulting relationship with the Company and to pay the remaining
Three Hundred Thirty-Six Thousand Six Hundred Sixty-six Dollars ($336,666.00) consulting fees
payable to Professor Lemperle under the Separation Agreement in a lump sum payment (the
“Termination Payment”) contingent upon Professor Lemperle’s execution and delivery of this
Agreement.

     D. Professor Lemperle acknowledges the sufficiency of the consideration to be received by him,
and in return desires to release the Company from any and all claims which Professor Lemperle has,
or might have, against the Company as of the date of execution of this Agreement.

AGREEMENT

     NOW, THEREFORE, for and in consideration of the Company’s payment to him under the terms of
this Agreement and for other valuable consideration the receipt of which is hereby acknowledged,
Professor Lemperle agrees as follows:

     1. Payment of Termination Payment. Pursuant to Section 10.3 of the Separation
Agreement, the Company hereby terminates Professor Lemperle’s consulting relationship effective as
of the date of this Agreement. Within two business days of Professor Lemperle’s delivery to the
Company of (a) an executed copy of this Agreement and (b) an executed copy of the lock-up agreement
attached hereto as Exhibit A, the Company shall pay the Termination Payment to Professor
Lemperle by check or wire transfer. Professor Lemperle acknowledges and agrees that upon his
receipt of the Termination Payment, Professor Lemperle will have received all consideration due to
him under the Separation Agreement or otherwise from the Company except as otherwise set forth
herein, and Professor Lemperle shall have no relationship with the Company other than as a
stockholder of the Company. Professor Lemperle acknowledges and agrees that notwithstanding the
termination of his consulting relationship with the Company, certain obligations of Professor
Lemperle under the Separation Agreement shall remain in full force and effect as set forth herein
below. Pursuant to Section 3.2 of the Separation Agreement, Professor Lemperle shall be solely
responsible for any and all of his tax obligations related to

 

 

the Termination Payment, including but not limited to, all city, state and federal income
taxes, social security withholding tax and other self employment tax.

     2. No Representation of Affiliation with the Company . From and after Effective Date,
Professor Lemperle agrees that he will not make any voluntary statements, written or verbal, or
cause or encourage others to make any statements that reference the Company, its products,
proprietary information or intellectual property without the prior written consent of the President
of the Company if such statements would lead a reasonable person to conclude that Professor
Lemperle was affiliated with the Company, or an agent or representative of the Company. This
provision shall apply to scientific publications, articles and papers, oral and written
presentations at conferences or symposia, or any other public dissemination of information that
references Artes Medical, its business, products, patents, trademarks or any other intellectual or
proprietary information of the Company, which shall be submitted to the President for review and
written approval prior to any such publication or presentation.

     3. Prohibitions on Use of Injectible Products of the Company. From and after the
Effective Date until the Company is in receipt of final FDA approval to market its product,
ArteFill, Professor Gottfried Lemperle agrees that he shall not engage in the use of any injectible
medical products or devices of the Company or holding the trademark of the Company, including
Artecoll and Artefill, on any persons world-wide.

4. Lock-Up Agreement.

          (a) Lock-Up Period; Agreement. In connection with the initial public offering of the
Company’s common stock, Professor Lemperle agrees not to sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of any securities of the Company he now or
hereafter owns (whether directly or indirectly and whether of record or beneficially) without the
prior written consent of the Company or such underwriters, as the case may be, for such period of
time (not to exceed 180 days) from the effective date of such registration as may be requested by
the Company or such managing underwriters. Simultaneously with the execution of this Agreement,
Professor Lemperle shall execute and deliver a Lock-Up Agreement to the Company in the form
attached as Exhibit A, and which is incorporated herein by this reference.

          (b) Limitations. The obligations described in Section 3(a) shall not apply to a
registration relating solely to employee benefit plans, or to a registration relating solely to a
transaction pursuant to Rule 145 under the Securities Act of 1933, as amended.

          (c) Stop-Transfer Instructions. In order to enforce the foregoing covenants, the
Company may impose stop-transfer instructions with respect to the securities of Professor Lemperle.

          (d) Transferees Bound. The Professor Lemperle agrees that it will not transfer
securities of the Company unless each transferee agrees in writing to be bound by all of the
provisions of this Section 3, provided that this Section 3 shall not apply to transfers
pursuant to a registration statement or transfers after the 12-month anniversary of the effective
date of the Company’s initial registration statement subject to this Section 3.

     5. General Release. Professor Lemperle for himself, his heirs, executors,
administrators, assigns and successors, fully and forever releases and discharges the Company and
each of its current,
former and future parents, subsidiaries, related entities, employee benefit plans and their
fiduciaries, predecessors, successors, officers, directors, stockholders, attorneys, agents,
employees and assigns

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(collectively, “Releasees”), with respect to any and all claims,
liabilities and causes of action, of every nature, kind and description, in law, equity or
otherwise, which have arisen, occurred or existed at any time prior to the signing of this Release,
including, without limitation, any and all claims, liabilities and causes of action arising out of
or relating to Professor Lemperle’s consulting relationship with the Company or the cessation of
such consulting relationship.

     6. Knowing Waiver of Employment-Related Claims. Professor Lemperle understands and
agrees that he is waiving any and all rights he may have had, now has, or in the future may have,
to pursue against any of the Releasees any and all remedies available to him under any
employment-related causes of action, including without limitation, claims of wrongful discharge,
breach of contract, breach of the covenant of good faith and fair dealing, fraud, violation of
public policy, defamation, discrimination, personal injury, physical injury, emotional distress,
claims under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act, the Americans With Disabilities Act, the Federal Rehabilitation Act, the Family and
Medical Leave Act, the California Fair Employment and Housing Act, the California Family Rights
Act, the Equal Pay Act of 1963, the provisions of the California Labor Code and any other federal,
state or local laws and regulations relating to employment, conditions of employment (including
wage and hour laws) and/or employment discrimination.

     7. Waiver of Civil Code § 1542. Professor Lemperle expressly waives any and all
rights and benefits conferred upon him by Section 1542 of the Civil Code of the State of
California, which states as follows:

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

     Professor Lemperle expressly agrees and understands that this Release given by him pursuant to this
Release applies to all unknown, unsuspected and unanticipated claims, liabilities and causes of
action which he may have against the Company or any of the other Releasees.

     8. Severability of Release Provisions. Professor Lemperle agrees that if any
provision of the release given by him under this Agreement is found to be unenforceable, it will
not affect the enforceability of the remaining provisions and the courts may enforce all remaining
provisions to the extent permitted by law.

     9. Promise to Refrain from Suit or Administrative Action. Professor Lemperle promises
and agrees that he will never sue the Company or any of the other Releasees, or otherwise institute
or participate in any legal or administrative proceedings against the Company or any of the other
Releasees, with respect to any claim covered by the release provisions of this Agreement, including
but not limited to claims arising out of Professor Lemperle’s consulting relationship with the
Company or the termination of that consulting relationship, unless he is compelled by legal process
to do so.

     10. Nondisparagement. Professor Lemperle 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, its officers or directors.

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     11. Voluntary Execution. Professor Lemperle hereby acknowledges that he has read and
understands this Agreement and that he signs this Agreement voluntarily and without coercion.

     12. Acknowledgement of Ongoing Obligations. Professor Lemperle hereby acknowledges
that the Separation Agreement remains in full force and effect and his ongoing obligations to the
Company, including, without limitation, those arising under the Separation Agreement, the Voting
Agreement dated March 15, 2006 and the Confidentiality Agreement dated April 22, 2005, all
existing agreements related to the Company’s intellectual property, including the Proprietary
Information and Inventions Agreement; and the Non-Solicitation provisions of the Separation
Agreement. The Company hereby acknowledges its ongoing obligations to Professor Lemperle under the
Separation Agreement, including the payments of COBRA premiums and extension of the exercise period
for Professor Lemperle’s vested options, all as described in the Separation Agreement.

     13. Sole Owner of All Claims. The Professor Lemperle represents and warrants that he
is the sole owner of all claims relating to his consulting relationship with the Company and that
he has not assigned or transferred any claims relating to his consulting relationship to any other
person or entity.

     14. Representation by Counsel. The Professor Lemperle understands that he has the
right to consult with an attorney of his own choosing prior to executing this Agreement, and that
he has entered into this Agreement voluntarily, without coercion, and based upon his own judgment.
The Professor Lemperle understands and agrees that if any of the facts or matters upon which he now
relies in making this Agreement hereafter prove to be otherwise, this Agreement will nonetheless
remain in full force and effect.

     15. California Law. This Agreement and its terms shall be construed under the laws of
the State of California without regard to any conflict of laws principles.

     16. Entire Agreement. Employee acknowledges receipt of this Agreement and agrees
that this Agreement (including all exhibits attached hereto) represents the entire Agreement with
Employer concerning the subject matter hereof, and supersedes any previous oral or written
communications, representations, understandings or agreements with Employer or any agent thereof.
Employee understands that no representative of the Employer has been authorized to enter into any
agreement or commitment with Employee which is inconsistent in any way with the terms of this
Agreement.

[Remainder of this Page Intentionally Left Blank]

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     Professor Lemperle and the Company have executed this Agreement as of the Effective Date.

	 	 	 	 	 
	 	PROFESSOR LEMPERLE:

 	 
	 	/s/ Gottfried Lemperle, M.D.
 	 
	 	Dr. Gottfried Lemperle, M.D. 	 
	 	 	 
	 
	 	THE COMPANY:

ARTES MEDICAL, INC.

 	 
	 	By:  	/s/ Christopher J. Reinhard
 	 
	 	 	Christopher J. Reinhard 	 
	 	 	Its: Executive Chairman	 

 

 

EXHIBIT A

LOCK-UP AGREEMENT

Intentionally
omitted

A-1exv10w24

 

EXHIBIT 10.24

SETTLEMENT AGREEMENT

     This Settlement Agreement (this “Agreement”) is made as of May 12, 2006 (the “Effective Date”)
by and between Artes Medical, Inc. (“Artes Medical” or the “Company”) and Stifel, Nicolaus &
Company, Incorporated, as successor in interest to Legg Mason Wood Walker, Incorporated (“Stifel
Nicolaus”).

RECITALS

     A. The Company and Legg Mason Wood Walker, Incorporated (“Legg Mason”) are parties to a letter
agreement, dated on or about September 27, 2004, as amended pursuant to a letter agreement dated on
or about September 28, 2005 (collectively, the “Legg Mason Agreement”).

     B. Subsequent to the last amendment of the Legg Mason Agreement, substantially all of Legg
Mason’s Capital Markets business was acquired by Stifel Financial Corp. and, in connection with
this transaction, the Legg Mason Agreement was assigned to Stifel Nicolaus.

     C. The Company is currently in the process of preparing a Registration Statement for a firm
commitment underwritten public offering of its common stock pursuant to the Securities Act of 1933,
as amended, in which Cowen and Company, LLC (“Cowen”) and Lazard Capital Markets LLC (“Lazard”) are
serving as joint lead managing underwriters (the “2006 IPO”).

     D. Disputes have arisen between the parties regarding their respective rights and obligations
under the Legg Mason Agreement. The parties hereto desire to terminate the Legg Mason Agreement
and settle and resolve any disputes between them relating to the Legg Mason Agreement as of the
date hereof upon the terms and conditions set forth herein.

AGREEMENT

     NOW, THEREFORE, for and in consideration of the execution of this Agreement and the mutual
promises and covenants contained in the following paragraphs, the Company and Stifel Nicolaus agree
as follows:

     1. Termination of Prior Agreement. Effective immediately, the Company and Stifel
Nicolaus agree that the Legg Mason Agreement shall be terminated and canceled in its entirety and
shall have no further force or effect. The parties hereto further agree that neither party shall
have any ongoing obligations or rights under the Legg Mason Agreement. Notwithstanding the
foregoing or anything to the contrary in this Agreement, the Company and Stifel Nicolaus expressly
agree that: (a) no payments made to either Legg Mason or Stifel Nicolaus pursuant to the Legg Mason
Agreement prior to the date hereof are refundable or subject to any credit, set-off, refund or
counterclaim whatsoever, (b) Warrant No. LE-1, dated December 22, 2005, issued to Legg Mason to
purchase 200,000 shares of the Company’s Series E Preferred Stock at an exercise price of $2.50 per
share is validly issued, outstanding and enforceable against the Company in accordance with its
terms, and (c) Sections II(F) (and the related Attachment A), IV(D) and IV(F) of the Legg Mason
Agreement (the “Surviving Provisions”) shall remain in full force and effect and neither party has
waived or released its rights or obligations thereunder.

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     2. Termination Consideration. In consideration for Stifel Nicolaus’ agreement to
terminate the Legg Mason Agreement as set forth in Section 1 above and its general release below,
the Company agrees:

          (a) to pay Stifel Nicolaus $500,000 in cash within five days of the Effective Date; and

          (b) to offer Stifel Nicolaus the opportunity (if it so elects) to be included as a co-managing
underwriter in the 2006 IPO at a minimum fixed participation level of 20% of the aggregate number
of shares of the Company’s Common Stock to be offered in the 2006 IPO and to compensate Stifel
Nicolaus for such minimum fixed participation level in accordance with the underwriting agreement
to be entered into in connection with the 2006 IPO and otherwise on the same terms and conditions
as the other underwriters participating in the 2006 IPO (including payment of expenses and fees).

          Stifel Nicolaus hereby agrees that the Company is under no obligation to complete the 2006
IPO; and the Company hereby agrees that Stifel Nicolaus is under no obligation to serve as a
co-managing underwriter for the 2006 IPO. If Stifel Nicolaus elects to participate as an
underwriter in the 2006 IPO, it agrees to provide customary services to the Company as a
co-managing underwriter. The consideration payable to Stifel Nicolaus pursuant to subsection 2(b)
above in connection with its service as an underwriter for the 2006 IPO will be set forth in a
customary underwriting agreement to be entered into by the Company with the lead managing
underwriters, Stifel Nicolaus and any other underwriter participating in the 2006 IPO. For
purposes of clarity, Stifel Nicolaus shall only be entitled to compensation as an underwriter under
Section 2(b) if the 2006 IPO is declared effective and the Company closes the 2006 IPO. If (i) the
Company’s Board of Directors, acting in good faith in accordance with their fiduciary duties,
determines by written consent or at a duly convened meeting of the Board of Directors that it would
be in the best interests of the Company and its stockholders to stop pursing the 2006 IPO and the
Company actually withdraws their registration statement or (ii) Cowen and Lazard both inform the
Company in writing that they are unwilling to pursue the 2006 IPO, then Stifel Nicolaus shall have
no further rights to serve as an underwriter or in any other capacity in connection with any
subsequent underwritten public offering of the Company or any other transaction or financing
pursued by the Company and shall not be entitled to any compensation or other consideration
pursuant to Section 2(b).

     3. Releases and Representations and Warranties.

          (a) Release by Stifel Nicolaus. Subject to and conditioned upon the Company’s full
compliance with the terms of this Agreement, including but not limited to Section 2 above, Stifel
Nicolaus does hereby unconditionally, irrevocably and absolutely release, discharge, waive and
relinquish any and all loss, liability, claims, demands, causes of action or suits of any kind,
nature, character and description whatsoever, whether known or unknown, however arising, fixed or
contingent, whether in law and/or in equity, related directly or indirectly, which Stifel Nicolaus
now has or hereafter may be entitled to claim against Artes Medical or its owners, directors,
officers, employees, representatives, agents, attorneys, stockholders, insurers, divisions,
successors and assigns, and any related holding, parent, sister or subsidiary corporations or
affiliates (collectively, “Artes Released Parties”), arising from or in

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connection with the Legg Mason Agreement and the transactions contemplated thereby; provided,
however, that the foregoing release shall not apply to the Surviving Provisions or to any of the
terms and provisions of this Agreement.

          (b) Release by Artes Medical. Subject to and conditioned upon Stifel Nicolaus’ full
compliance with the terms of this Agreement, including but not limited to Section 2 above, Artes
Medical does hereby unconditionally, irrevocably and absolutely release, discharge, waive and
relinquish any and all loss, liability, claims, demands, causes of action or suits of any kind,
nature, character and description whatsoever, whether known or unknown, however arising, fixed or
contingent, whether in law and/or in equity, related directly or indirectly, which Artes Medical
now has or hereafter may be entitled to claim against Stifel Nicolaus or its owners, directors,
officers, employees, representatives, agents, attorneys, stockholders, insurers, divisions,
successors and assigns, and any related holding, parent, sister or subsidiary corporations or
affiliates (collectively, “Stifel Nicolaus Released Parties”), arising from or in connection with
the Legg Mason Agreement and the transactions contemplated thereby; provided, however, that the
foregoing release shall not apply to the Surviving Provisions or to any of the terms and provisions
of this Agreement.

          (c) No Further Action. Stifel Nicolaus irrevocably and absolutely agrees that Stifel
Nicolaus will not prosecute nor allow to be prosecuted on its behalf, in any administrative agency,
whether federal or state, or in any court, whether federal or state, or in any foreign jurisdiction
any claim or demand of any type related to the matters released above, it being the intention of
the Parties that with the execution by Stifel Nicolaus of this release, Artes Medical and the Artes
Released Parties will be absolutely, unconditionally and forever discharged of and from all
obligations to or on behalf of Stifel Nicolaus related in any way to the matters discharged herein.
Artes Medical irrevocably and absolutely agrees that Artes Medical will not prosecute nor allow to
be prosecuted on its behalf, in any administrative agency, whether federal or state, or in any
court, whether federal or state, or in any foreign jurisdiction any claim or demand of any type
related to the matters released above, it being the intention of the Parties that with the
execution by Artes Medical of this release, Stifel Nicolaus and the Stifel Nicolaus Released
Parties will be absolutely, unconditionally and forever discharged of and from all obligations to
or on behalf of Artes Medical related in any way to the matters discharged herein.

          (d) Section 1542 Waiver.

                    (i) Stifel Nicolaus hereby acknowledges and represents that it has been informed by its
attorneys of, and is familiar with, Section 1542 of the Civil Code of the State of California,
which reads as follows:

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

                    Stifel Nicolaus hereby waives and relinquishes any and all rights and benefits under Section
1542 of the Civil Code, if any, as presently in effect and as amended from time to time hereafter,
and under any successor thereto, with respect to the matters released herein.

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                    (ii) Artes Medical hereby acknowledges and represents that it has been informed by its
attorneys of, and is familiar with, Section 1542 of the Civil Code as quoted above. Artes Medical
hereby waives and relinquishes any and all rights and benefits under Section 1542 of the Civil
Code, if any, as presently in effect and as amended from time to time hereafter, and under any
successor thereto, with respect to the matters released herein.

     4. Integrated Agreement. The parties acknowledge and agree that no promises or
representations were made to them which do not appear written herein and that this Agreement
contains the entire agreement of the parties on the subject matter thereof, and such Agreement
supersedes all previous oral and written and all contemporaneous oral negotiations, commitments and
understandings. The parties further acknowledge and agree that parol evidence shall not be
required to interpret the intent of the parties.

     5. Waiver, Amendment and Modification. The parties agree that no waiver, amendment or
modification of any of the terms of this Agreement shall be effective unless in writing and signed
by all parties affected by the waiver, amendment or modification. No waiver of any term, condition
or default of any term of this Agreement shall be construed as a waiver of any other term,
condition or default.

     6. Representation by Parties. Each of the parties acknowledge that they have entered
into this Agreement voluntarily, without coercion, and based upon their own judgment and not in
reliance upon any representations or promises made by the other party or parties or any attorneys,
other than those contained within this Agreement. The parties further agree that if any of the
facts or matters upon which they now rely in making this Agreement hereafter prove to be otherwise,
this Agreement will nonetheless remain in full force and effect.

     7. Successors and Assigns. The terms and conditions of this Agreement shall inure to
the benefit of and be binding on the respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party, other than the parties
hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement.

     8. Severability. If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.

     9. New York Law. Consistent with the Legg Mason Agreement, the parties agree that
this Agreement and its terms shall be governed by, and construed in accordance with, the laws of
the State of New York, without regard to such state’s principles of conflicts of laws.

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

[Remainder of this Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 
	COMPANY:	 	ARTES MEDICAL, INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/  Peter C. Wulff
	 

	 	 	 	 
	 

	 	 	 	Peter C. Wulff

Chief Financial Officer
	 
	 	 	 	 
	 
	 	 	 	 
	STIFEL NICOLAUS:	 	STIFEL, NICOLAUS & COMPANY, INCORPORATED
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/  Richard J. Himelfarb
	 

	 	 	 	 
	 

	 	Name:	 	Richard J. Himelfarb
	 

	 	 	 	 
	 

	 	Title:	 	Executive Vice President
	 

	 	 	 	 

[SIGNATURE PAGE TO
SETTLEMENT AGREEMENT]

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