Exhibit 10.38

Portions of this document have been redacted pursuant to a Request
for Confidential Treatment filed with the Securities and Exchange Commission.
Redacted portions are indicated with the notation "*****"


                        FOUNDER STOCK PURCHASE AGREEMENT
                        --------------------------------


               THIS  AGREEMENT  is made  this 12th day of  April,  2001,  by and
between Spine Wave, Inc., a Delaware  corporation  (the "Company"),  and Protein
Polymer Technologies, Inc. ("Purchaser").

               NOW THEREFORE, IT IS HEREBY AGREED:

               1. Sale of Stock.  Subject to the terms hereof, the Company shall
sell to Purchaser  and  Purchaser  shall  purchase  from the Company One Million
(1,000,000)  shares of common stock of the Company (the  "Stock").  The sale and
purchase  shall  occur at the offices of the Company on the date set forth above
or at such other place and time as the parties may agree (the "Closing").

               2.  Consideration.  In exchange for and as full consideration for
the Stock,  the Purchaser shall enter into that certain  License  Agreement with
the Company attached hereto as Exhibit A (the "License  Agreement")  pursuant to
which Purchaser grants to the Company exclusive rights to certain of Purchaser's
intellectual  property  solely for use in the Field (as  defined in the  License
Agreement).  In addition,  Purchaser  shall deliver two (2) duly executed  blank
Assignments  Separate from Certificate in the form attached hereto as Exhibit C,
which  Assignments  Separate from  Certificate  shall only be used in connection
with the exercise of the Company's  Repurchase  Option as set forth in Section 4
below.  The Company and the  Purchaser  agree that the fair market value of each
share of Stock as of the date of this  Agreement  equals  $0.01 per  share  (the
"Purchase Price").

               3.  Issuance of Stock.  Upon the  execution  and  delivery of the
License  Agreement by the  Purchaser,  the Company  shall issue a duly  executed
certificate  evidencing the Stock in the name of Purchaser and provide Purchaser
with a copy of such certificate.  The original of such certificate shall be held
in escrow by the  Company  until the  expiration  of the  Repurchase  Option (as
defined  below);  provided  however,  upon  Purchaser's  request,  Company shall
release to  Purchaser a  certificate  representing  that number of shares of the
Stock  which,  as of the date of such  request,  are no  longer  subject  to the
Repurchase Option set forth in Section 4 below.

               4. Repurchase  Option. The Stock shall be subject to a right (but
not an obligation) of repurchase by the Company (the "Repurchase  Option").  The
Company shall have the right to purchase Unvested Shares (as defined below) from
the  Purchaser  at the  Purchase  Price on or after  termination  of the License
Agreement (such termination to be pursuant to the terms set forth therein).

                  a. This  Repurchase  Option shall lapse in accordance with the
schedule  attached  hereto as  Exhibit B (the  "Schedule")  which sets forth the
amount of Stock which may be repurchased  under the Repurchase Option ("Unvested
Shares") and the  corresponding  contingencies  for  repurchase.  The Repurchase
Option shall  terminate and cease to be exercisable  with respect to any and all
Unvested  Shares  upon the  earlier of (i) the date that is seven years from the
date hereof; (ii) the date upon which the*****


-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.


<PAGE>



(iii) the consummation of a merger, consolidation or other reorganization of the
Company  ("Merger") in which (1)  securities  representing  more than 50% of the
total combined voting power of the voting  securities of the successor  business
entity are not immediately thereafter  beneficially owned directly or indirectly
and in substantially  the same proportion by the persons who beneficially  owned
the Company's outstanding voting securities immediately prior to such Merger, or
(2) the consideration to the Company's stockholders for the Merger is not solely
voting  securities,  or (3) at least 50% of the  senior  executive  officers  of
Company  immediately  prior to the Merger do not  continue  as senior  executive
officers  of the  successor  business  entity;  (iv) the  completion  of a sale,
transfer  or other  disposition  of all or  substantially  all of the  Company's
assets;  or (v) the  consummation of the Company's sale of its common stock in a
public offering pursuant to a registration statement under the Securities Act of
1933, as amended (the "Act").

                  b. The Repurchase  Option shall be exercised by written notice
signed by the President or Treasurer of the Company and delivered as provided in
subparagraph  10(b)  hereof.  The Company may pay for the shares of Stock it has
elected to  repurchase  by delivery of a cashier's  check or by wire transfer of
immediately  available funds in an aggregate  amount equal to the Purchase Price
multiplied by the number of shares of Stock being repurchased.

                  c. Adjustments to Stock. If, from time to time during the term
of  the  Repurchase  Option,   there  is  any  change  affecting  the  Company's
outstanding  common  stock as a class that is  effected  without  the receipt of
consideration  by the Company (through  merger,  consolidation,  reorganization,
reincorporation,  stock  dividend,  dividend in property other than cash,  stock
split,  liquidating,  dividend,  combination  of shares,  change in  corporation
structure or other transaction not involving the receipt of consideration by the
Company),  then any and all new,  substituted or additional  securities or other
property to which  Purchaser is entitled by reason of  Purchaser's  ownership of
Stock shall be immediately  subject to the Repurchase  Option and be included in
the word "Stock" for all purposes of the  Repurchase  Option with the same force
and  effect as the  shares  of the Stock  presently  subject  to the  Repurchase
Option,  but only to the  extent  the Stock is,  at the  time,  covered  by such
Repurchase  Option.  While the  aggregate  Purchase  Price shall remain the same
after each such event,  the Purchase  Price per share of Stock upon  exercise of
the Repurchase Option shall be appropriately adjusted.

               5. Right of First Refusal. Stock subject to the Repurchase Option
may not be  transferred,  except  for  transfers  by  operation  of law or other
involuntary  transfer.  Before  any  shares of Stock  registered  in the name of
Purchaser and not subject to the  Repurchase  Option may be sold or  transferred
(excluding  transfer by operation  of law or other  involuntary  transfer)  such
shares shall first be offered to the Company in the following manner:

                  a. The  Purchaser  or its  transferee  shall  deliver a notice
pursuant to subparagraph  10(b)  ("Notice") to the principal  business office of
the Company stating (i) the bona fide intention to sell or transfer such shares,
(ii) the  number of such  shares of Stock to be sold or  transferred,  (iii) the
price and other tennis,  if any, for which Purchaser or its transferee  proposes
to sell or transfer  such shares of Stock,  and (iv) the name and address of the
proposed  purchaser  or  transferee  and that such  purchaser or  transferee  is
committed to acquire the stated number of shares on the stated price and terms.


                                       2
<PAGE>



                  b. The Company  shall have the right at any time within twenty
(20) days of receipt of the  Notice to  purchase  all of the shares to which the
Notice refers at the price per share specified in the Notice,  or if no price is
specified  therein,  at the fair market value thereof as determined by the Board
of  Directors in good faith.  Said right shall be  exercised  by written  notice
signed by the  President or any Vice  President of the Company and  delivered as
provided in  subparagraph  10(b)  hereof,  which notice shall  specify the time,
place and date for settlement of such purchase.

                  c. In the event the Company does not, for any reason, exercise
its right  pursuant  hereto,  the Company may assign such right,  provided  such
right shall not extend  beyond such twenty (20) day period.  If exercised by the
assignee  pursuant  hereto,  the right to purchase shall be exercised by written
notice  signed  by  the  exercising   assignee  and  delivered  as  provided  in
subparagraph  10(b) hereof,  which notice shall specify the time, place and date
for settlement of such purchase.  Purchaser shall sell the shares to the Company
or such assignees within thirty (30) days after the date of the Notice.

                  d. If all of the  shares to which the  Notice  refers  are not
purchased,  as provided in  subparagraphs  5(b) or 5(c) above, the Purchaser may
sell  such  shares  to the  person  named in the  Notice  at the price and terms
specified  in the Notice,  provided  that such sale or  transfer is  consummated
within  seventy  five (75) days of the date of the  Notice to the  Company,  and
provided  further  that any such  sale is in  accordance  with all the terms and
conditions  hereof. If Purchaser does not consummate the sale or transfer within
such seventy five (75) day period,  the right provided hereby shall be deemed to
be revived with respect to such shares and no sale or transfer shall be effected
without first offering the shares in accordance herewith.

                  e.  Notwithstanding  the above,  neither  the  Company nor the
assignees  of the  Company  shall  have any right of first  refusal  under  this
Section 5 at any time  subsequent  to the  following:  i) the  closing of a bona
fide,  firm commitment  underwritten  public offering of the common stock of the
Company pursuant to a Registration  Statement  declared effective under the Act,
or ii) the  first  date on which  the  Stock is held of record by more than five
hundred (500) persons.  In addition,  the Company's right of first refusal under
this Section 5 shall not apply to the proposed  sale or transfer by Purchaser of
stock subject to this Agreement as part of the sale of all or substantially  all
of  Purchaser's  assets ("Sale of Assets")  except in the event that the Sale of
Assets is to a direct  competitor  of the Company or to such other  entity which
directly or indirectly  controls a direct competitor of the Company and provided
that in such circumstance,  the time period set forth in subparagraph 5(d) above
shall be 180 days.

               6. "Market  Stand-Off"  Agreement.  Purchaser hereby agrees that,
during  the  period  specified  by the  Company  (such  period not to exceed one
hundred eighty (180) days in the case of an initial public offering,  and ninety
(90)' days for all subsequent  offerings) and the underwriter or underwriters of
common stock (or other  securities) of the Company  following the effective date
of a registration  statement of the Company filed under the Act, Purchaser shall
not, to the extent  requested by the Company and such  underwriter,  and without
the prior written consent of the managing underwriter of such offering, directly
or indirectly,  sell, offer or contract to sell (including,  without limitation,
any short sale),  grant any option to purchase or otherwise  transfer or dispose
of (other than to donees who agree to be similarly  bound) any securities of the
Company at any time during  such period  except  common  stock  included in such
registration,


                                       3
<PAGE>



provided,  however, that all officers,  directors,  founders (to the extent such
founder is employed by the Company at such time) and beneficial holders of 5% or
more of the  Company  holding  securities  of the  Company  enter  into  similar
agreements.

               In order to enforce  the  foregoing  covenant,  the  Company  may
impose stop-transfer instructions with respect to common stock held by Purchaser
until the end of such period.

               7. Representations and Warranties of Purchaser.

                  a. Due Authorization. Purchaser hereby represents and warrants
to Company that it is duly  authorized  and  empowered to enter into and perform
this Agreement; and the execution and performance of this Agreement by Purchaser
does  not and  will  not  conflict  with or  violate  any  contract,  agreement,
indenture,  mortgage, instrument, writ, judgment, or order of any court, arbiter
or governmental or  quasi-governmental  body to which Purchaser is a party or by
which Purchaser is bound.

                 b. Investment Intent.  This Agreement is made with Purchaser in
reliance upon its representation to the Company, which by Purchaser's acceptance
hereof  confirms,  that the Stock has been acquired by Purchaser for  investment
for an indefinite period for Purchaser's own account, not as a nominee or agent,
and not with a view to the sale or  distribution  of any part thereof,  and that
Purchaser has no present  intention of selling,  granting  participation  in, or
otherwise distributing the same. By executing this Agreement,  Purchaser further
represents that Purchaser does not have any contract, undertaking,  agreement or
arrangement with any person to sell, transfer, or grant participations,  to such
person or to any third person, with respect to any of the Stock.

                  c. Restricted Securities. Purchaser understands that the Stock
has not been registered  under the Act, on the ground that the sale provided for
in this Agreement is exempt from the  registration  requirements of the Act, and
that the  Company's  reliance on such  exemption is  predicated  on  Purchaser's
representations set forth herein.

               Purchaser  understands that if the Company does not register with
the  Securities  and  Exchange  Commission  pursuant  to Section 12 or 15 of the
Securities  Exchange Act of 1934,  as amended,  or if a  registration  statement
covering  the Stock (or a filing  pursuant to the  exemption  from  registration
under  Regulation  A of the Act) under the Act is not in effect  when  Purchaser
desires to sell the Stock,  Purchaser  may be  required to hold the Stock for an
indeterminate period. The Purchaser also acknowledges that Purchaser understands
that any sale of the Stock that might be made  Purchaser  in reliance  upon Rule
144 under the Act may be made only in  limited  amounts in  accordance  with the
terms and conditions of that rule and that Purchaser may not be able to sell the
Stock at the time or in the amount  Purchaser so desires.  Purchaser is familiar
with Rule 144 and understands that the Stock constitutes "restricted securities"
within the meaning of that Rule.

                  d.  Investment  Experience.  In connection with the investment
representations  made herein  Purchaser  represents  that Purchaser is either an
"Accredited  Investor",  as that term is  defined  in Rule 501 of  Regulation  D
promulgated under the Act, or is


                                       4
<PAGE>



able to fend for itself in the transactions  contemplated by this Agreement, has
such knowledge and experience in financial and business matters as to be capable
of evaluating  the merits and risks of its  investment,  has the ability to bear
the economic  risks of its  investment  and has been  furnished with and has had
access to such  information as Purchaser has requested and deems  appropriate to
its investment decision.

                  e.  Limitations on  Disposition.  Purchaser  agrees that in no
event will Purchaser  make a disposition  of any of the Stock,  unless and until
(i) Purchaser shall have notified the Company of the proposed  disposition,  and
(ii)  Purchaser  shall have  furnished  the  Company  with an opinion of counsel
satisfactory to the Company to the effect that such disposition will not require
registration of such Stock under the Act or that  appropriate  action  necessary
for  compliance  with the Act has been taken,  or (iii) the  Company  shall have
waived,  expressly and in writing, its rights under clauses (i) and (ii) of this
subparagraph.  In addition,  prior to any  disposition of any of the Stock,  the
Company  shall  require  the  transferee  or  assignee  to  provide  in  writing
investment  representations and such transferee's or assignee's agreement to .be
bound by the right of first refusal and market stand-off  provisions hereof in a
form acceptable to the Company.

               The Company  shall not be  required  (I) to transfer on its books
any shares of Stock of the Company which shall have been sold or  transferred in
violation of any of the provisions set forth in this Agreement, or (II) to treat
as owner of such  shares or to accord  the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so  transferred.
Purchaser  shall,  during the term of this  Agreement,  exercise  all rights and
privileges of a  stockholder  of the Company with respect to the Stock after the
issuance, and prior to the repurchase, thereof.

                  f. Legends. All certificates  representing any shares of Stock
of the Company  subject to the provisions of this Agreement  shall have endorsed
thereon the following legends:

               (i) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED (THE  "ACT").  THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION
OR RESALE,  AND THEY MAY NOT BE  TRANSFERRED  WITHOUT AN EFFECTIVE  REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE ACT OR PURSUANT TO RULE 144 UNDER THE ACT OR
AN OPINION OF COUNSEL  SATISFACTORY  TO THE  COMPANY  THAT  REGISTRATION  IS NOT
REQUIRED UNDER THE ACT."

               (ii) "THE SECURITIES  REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS  AND  CONDITIONS  OF A CERTAIN  FOUNDER  STOCK  PURCHASE  AGREEMENT
BETWEEN THE  COMPANY AND THE HOLDER  HEREOF  WHICH  INCLUDES A MARKET  STAND-OFF
AGREEMENT, A RIGHT OF REPURCHASE AND A RIGHT OF FIRST REFUSAL ON THE SALE OF THE
SECURITIES. THESE SECURITIES MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED,
OR IN ANY  MANNER  DISPOSED  OF  EXCEPT  IN  CONFORMITY  WITH THE  TERMS OF SUCH




                                       5
<PAGE>



AGREEMENT.  COPIES OF THE AGREEMENT MAY BE OBTAINED UPON WRITTEN  REQUEST TO THE
SECRETARY OF THE COMPANY."

               (iii) Any legend  required  to be placed  thereon  by  applicable
state laws.

               8. Conditions Precedent to Purchaser's  Obligations.  Pursuant to
the terms of that certain Convertible Promissory Note Purchase Agreement of even
date herewith (the "Note Purchase Agreement"), on the date of Closing, Windamere
II LLC  ("Investor")  shall have  purchased  and  Company  shall have  issued to
Investor that certain Convertible  Promissory Note in aggregate principal amount
of  $200,0000  (the  "Convertible  Note").  Pursuant  to the  terms  of the Note
Purchase  Agreement,  Investor  shall have the right to  purchase,  in  $100,000
increments,  up to $300,000 aggregate principal amount of additional convertible
promissory notes on the same terms as the Convertible Note.

               9. Representations and Warranties of Company.

                  a. As of the date of Closing,  the authorized capital stock of
the Company  consists of 4,000,000  shares of common stock,  $.001 par value per
share, (the "Common Stock").

                  b.  As of the  date  of  Closing,  the  Company  has  reserved
1,500,000  shares of Common Stock for issuance  pursuant to the  Company's  2001
Stock Option/Stock Issuance Plan.

                  c. Immediately  following the Closing,  the Company shall have
issued and outstanding 2,950,000 shares of Common Stock.

                  d. Company hereby represents and warrants to Purchaser that it
is duly authorized and empowered to enter into and perform this  Agreement;  and
the execution and performance of this Agreement by the Company does not and will
not  conflict  with or violate any  contract,  agreement,  indenture,  mortgage,
instrument,  writ,  judgment,  or order of any court, arbiter or governmental or
quasi-governmental  body to which the Company is a party or by which the Company
is bound.

               10. Miscellaneous.

                  a.  Further  Instruments  and  Actions.  The parties  agree to
execute  such  further  instruments  and to  take  such  further  action  as may
reasonably be necessary to carry out the intent of this Agreement.

                  b. Notices.  All notices required or permitted hereunder shall
be in writing and shall be deemed  effectively given: (i) upon personal delivery
to the party to be notified,  (ii) when sent by confirmed facsimile transmission
if sent during normal business hours of the recipient;  if not, then on the next
business day, or (iii) for domestic addresses one (1) business day after deposit
with a nationally  recognized  overnight courier,  specifying next day delivery,
with written  verification of receipt and for international  addresses three (3)
business  days after  deposit with a nationally  recognized  overnight  courier,
specifying  next  day  delivery,  with  written  verification  of  receipt.  All
communications shall be sent to the




                                       6
<PAGE>



party to be notified at the address as set forth on the  signature  pages hereof
or at such other  address as such party may  designate  by ten (10) days advance
written notice to the other parties hereto.

                  c. Governing Law,  Assignment and Enforcement.  This Agreement
is governed by the internal law of California  and shall inure to the benefit of
the successors and assigns of the Company and,  subject to the  restrictions  on
transfer  herein set forth,  be  binding  upon  Purchaser,  its  successors  and
assigns.  The prevailing  party in any action to enforce this Agreement shall be
entitled to attorneys' fees and costs. The parties agree that damages are not an
adequate  remedy for breach hereof and each party shall  accordingly be entitled
to specific performance of this Agreement.

                  d. Entire  Agreement;  Amendments and Waivers.  This Agreement
and the  related  License  Agreement,  Supply  and  Services  Agreement,  Voting
Agreement and Escrow  Agreement,  among  Purchaser and Company,  and all of even
date herewith,  constitute the entire  agreement and  understanding  between the
parties with respect to the subject matter  contained  herein,  and there are no
promises, representations, conditions, provisions or terms related thereto other
than as set forth in this  Agreement  and the  related  License  Agreement,  the
Supply and Services Agreement, Voting Agreement and Escrow Agreement between the
Purchaser  and Company all of even date  herewith.  This  Agreement  may only be
amended with the written consent of the parties hereto,  or their  successors or
assigns,  and  no  oral  waiver  or  amendment  shall  be  effective  under  any
circumstances whatsoever.

                  e.  Cooperation.  Purchaser agrees to cooperate  affirmatively
with the Company, to the extent reasonably  requested by the Company, to enforce
rights and obligations pursuant to this Agreement.

               11.  California  Commissioner  of  Corporations.  THE SALE OF THE
SECURITIES  WHICH ARE THE SUBJECT OF THIS  AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE ISSUANCE OF
SUCH  SECURITIES  OR THE  PAYMENT OR  RECEIPT  OF ANY PART OF THE  CONSIDERATION
THEREFOR PRIOR TO SUCH  QUALIFICATION  IS UNLAWFUL UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM  QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS  CODE.  THE RIGHTS OF ALL PARTIES TO THIS  AGREEMENT  ARE EXPRESSLY
CONDITIONED UNLESS THE SALE IS SO EXEMPT.



                                       7
<PAGE>





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

                                    SPINE WAVE, INC.


                                    By:    /s/ David Coats
                                           -------------------------------------
                                           David Coats
                                           President and Chief Executive Officer

                      Address:      12230 El Camino Real, Suite 300
                                    San Diego, California  92130


                                    PURCHASER

                                    Protein Polymer Technologies, Inc.


                                    /s/ J. Thomas Parmeter
                                    --------------------------------------------
                                           J. Thomas Parmeter
                                           President and Chief Executive Officer

                      Address:      10655 Sorrento Valley Road
                                    San Diego, California  92121



              [SIGNATURE PAGE TO FOUNDER STOCK PURCHASE AGREEMENT]

<PAGE>





                                    EXHIBIT B
                                    ---------

                                VESTING SCHEDULE

---------------------------------------- ---------------------------------------
Amount of Stock which                    Contingency
constitutes Unvested Shares:
---------------------------------------- ---------------------------------------

---------------------------------------- ---------------------------------------
100% of the Stock                        Before the First Trigger
---------------------------------------- ---------------------------------------
66% of the Stock                         On or after the First Trigger
---------------------------------------- ---------------------------------------
33% of the Stock                         On or after the Second Trigger
---------------------------------------- ---------------------------------------
0% of the Stock                          On or after the Third Trigger
---------------------------------------- ---------------------------------------

For  purposes  of this  Exhibit B, the  defined  terms used above shall have the
following meanings:

"First  Trigger"  shall  mean the date on which  the  Company  receives*****

"Second  Trigger"  shall mean the  earlier of (a) the date on which the  Company
initiates***** or (b) the date on which*****

"Third  Trigger"  shall mean the earlier of (i) the date***** (ii) the date upon
which the Company has  received***** and (iii)*****

"Product(s)"  shall mean (i) any product in the Field (as defined in the License
Agreement)  which is covered in whole or in part by at least one Valid Claim (as
defined in the  License  Agreement)  of the  Patents  (as defined in the License
Agreement);  and (ii) any  product  in the Field  made by any  process  which is
covered in whole or in part by at least one Valid Claim of Patents.

*****

*****


-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.


<PAGE>



                                    EXHIBIT C
                                    ---------

                      ASSIGNMENT SEPARATE FROM CERTIFICATE





               FOR VALUE  RECEIVED,  Protein Polymer  Technologies,  Inc. hereby
sells,     assigns    and     transfers     unto     __________________________,
_______________________  (____) shares of the Common Stock of Spine Wave,  Inc.,
standing in its name on the books of said corporation represented by Certificate
No.  ____   herewith   and  do  hereby   irrevocably   constitute   and  appoint
___________________  attorney  to  transfer  said  stock  on  the  books  of the
within-named corporation with full power of substitution in the premises.

Dated:  ______________________, ____


                                     Protein Polymer Technologies, Inc.



                                     -------------------------------------------
                                     By:  Thomas Parmeter
                                     Its:  President and Chief Executive Officer



               This  Assignment   Separate  from  Certificate  was  executed  in
conjunction  with the terms of a Founder Stock  Purchase  Agreement  between the
above assignor and Spine Wave, Inc. dated April 12, 2001.