Termination and General Release
EXHIBIT 10.23
This Termination Agreement and General Release (this “Agreement”) is made and given by
Xxxxxxxxx Xxxxxxxx, M.D. (the “Xxxxxxxxx Xxxxxxxx”) 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. Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx Xxxxxxxx’x retirement from the Company, the Company and
Xxxxxxxxx Xxxxxxxx entered into a Separation Agreement, dated March 16, 2006 (the “Separation
Agreement”), that provides for the Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx Xxxxxxxx’x 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 Xxxxxxxxx Xxxxxxxx under the Separation Agreement in a lump sum payment (the
“Termination Payment”) contingent upon Xxxxxxxxx Xxxxxxxx’x execution and delivery of this
Agreement.
D. Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx Xxxxxxxx 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,
Xxxxxxxxx Xxxxxxxx agrees as follows:
1. Payment of Termination Payment. Pursuant to Section 10.3 of the Separation
Agreement, the Company hereby terminates Xxxxxxxxx Xxxxxxxx’x consulting relationship effective as
of the date of this Agreement. Within two business days of Xxxxxxxxx Xxxxxxxx’x 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 Xxxxxxxxx
Xxxxxxxx by check or wire transfer. Xxxxxxxxx Xxxxxxxx acknowledges and agrees that upon his
receipt of the Termination Payment, Xxxxxxxxx Xxxxxxxx will have received all consideration due to
him under the Separation Agreement or otherwise from the Company except as otherwise set forth
herein, and Xxxxxxxxx Xxxxxxxx shall have no relationship with the Company other than as a
stockholder of the Company. Xxxxxxxxx Xxxxxxxx acknowledges and agrees that notwithstanding the
termination of his consulting relationship with the Company, certain obligations of Xxxxxxxxx
Xxxxxxxx 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, Xxxxxxxxx Xxxxxxxx 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,
Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx
Xxxxxxxx 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, Xxxxxxxxx Xxxxxxxxx Xxxxxxxx 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, Xxxxxxxxx Xxxxxxxx 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,
Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx Xxxxxxxx.
(d) Transferees Bound. The Xxxxxxxxx Xxxxxxxx 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. Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx Xxxxxxxx’x consulting relationship with the Company or the cessation of
such consulting relationship.
6. Knowing Waiver of Employment-Related Claims. Xxxxxxxxx Xxxxxxxx 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. Xxxxxxxxx Xxxxxxxx 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.”
Xxxxxxxxx Xxxxxxxx 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. Xxxxxxxxx Xxxxxxxx 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. Xxxxxxxxx Xxxxxxxx promises
and agrees that he will never xxx 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 Xxxxxxxxx Xxxxxxxx’x consulting relationship with the
Company or the termination of that consulting relationship, unless he is compelled by legal process
to do so.
10. Nondisparagement. Xxxxxxxxx Xxxxxxxx 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. Xxxxxxxxx Xxxxxxxx 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. Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx Xxxxxxxx under the
Separation Agreement, including the payments of COBRA premiums and extension of the exercise period
for Xxxxxxxxx Xxxxxxxx’x vested options, all as described in the Separation Agreement.
13. Sole Owner of All Claims. The Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx Xxxxxxxx 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 Xxxxxxxxx Xxxxxxxx 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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Xxxxxxxxx Xxxxxxxx and the Company have executed this Agreement as of the Effective Date.
| XXXXXXXXX XXXXXXXX: |
||||
| /s/ Xxxxxxxxx Xxxxxxxx, M.D. | ||||
| Xx. Xxxxxxxxx Xxxxxxxx, M.D. | ||||
| THE COMPANY: ARTES MEDICAL, INC. |
||||
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxxx | |||
| Xxxxxxxxxxx X. Xxxxxxxx | ||||
| Its: Executive Chairman | ||||
EXHIBIT A
LOCK-UP AGREEMENT
Intentionally
omitted
A-1
