Document:

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EXHIBIT 10.13

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into and becomes effective as of July 1,
2005 (the “Effective Date”) by and between Artes Medical USA, Inc. (“Employer” or “Company”) and
Harald T. Schreiber (“Employee”).

RECITALS

     A. Employer is a Delaware corporation and is qualified to do business in the State of
California. Employee has provided services to Employer as a consultant since approximately February
1, 2004; and the parties desire to memorialize their relationship in writing pursuant to the terms
of this Agreement, which shall be a fully integrated agreement superceding any and all prior oral
or written understandings, representations, promises, or agreements between the parties.

     B. The Parties desire that Employee serve Employer as an employee in the capacity of Chief
Creative Officer as of the Effective Date.

     IN CONSIDERATION of the mutual promises and covenants of the Parties contained herein, and for
other good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree
as follows:

AGREEMENT

     1. Employment. Employer hereby engages Employee to serve as Chief Creative Officer
and Employee hereby accepts such engagement upon the terms and conditions set forth herein.

          a. Revocation of Prior Agreements/Assignment of Intellectual Property Rights. The
parties hereby rescind and revoke that certain License Agreement dated as of June 25, 2005 (the
“License Agreement”) and that certain Employment Agreement as of July 1, 2005 and all exhibits
attached thereto (“Employment Agreement”) and agree that this Agreement and its exhibits shall
supercede all such agreements and the License Agreement and Employment Agreement are hereby void
and of no effect.

     2. Term. The term of this Agreement shall begin on the Effective Date stated above
and shall remain in effect for four (4) years, unless terminated pursuant to Section 12. The
Agreement shall continue from year to year after July 1, 2009, unless or until terminated pursuant
to Section 12.

     3. Duties. Employee is employed to serve as Chief Creative Officer and shall perform
such duties as are set forth on Exhibit A, those duties which are customarily performed by a Chief
Creative Officer and such other duties as the Chief Executive Officer assigns from time to time.
Employee acknowledges that he will report to the Chief Executive Officer who will be Employee’s
supervisor until such time that such reporting requirements are modified by the Chief Executive
Officer. As part of Employee’s duties, Employee acknowledges and
understands that: (a) Employee will devote his utmost knowledge and best skill to the

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performance of his duties; (b) except as set forth otherwise below in Section 4, Employee will
devote one hundred percent of his professional time, attention and skill to the Employer and his
duties and responsibilities as the Chief Creative Officer; and (c) except as set forth otherwise
below in Section 4, Employee will not engage in any other gainful occupation which requires his
personal attention without prior consent of Employer, with the exception that Employee may
personally trade in stock, bonds, securities, commodities or real estate investments for his own
benefit.

     4. Non-Competition. During the Employment Term and for any subsequent period of time
during which Employee continues to receive compensation from Employer, Employee shall not, without
the prior written permission of Employer, directly or indirectly, (a) render any services to any
person, firm or corporation engaged in any Competitive Business (as defined below); (b) engage in
any Competitive Business for his own account; (c) become associated with or interested in any
Competitive Business as an individual, partner, shareholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor or in any other relationship of capacity;
(d) employ or retain, or have or cause any other person or entity to employ or retain, any person
who was employed or retained by Employer or its affiliates while the Employee was employed by
Employer. However, nothing in this Agreement shall preclude the Employee from investing his
personal assets in the securities of any Competitive Business if such securities are traded on a
national stock exchange or in the over-the-counter market if such investment does not result in his
beneficially owning, at any time, more than 4.9% of the publicity-traded equity securities of such
competitor. “Competitive Business” shall mean any business or enterprise which (a) designs, sells,
manufactures, markets and/or distributes injectable material for soft tissue augmentation or (b)
engages in any other business in which Employer is or has been involved during the twelve month
period immediately prior to the termination of the Employee’s employment. Notwithstanding the
foregoing, the parties acknowledge and Employer consents to the artistic and creative activities of
Employee, including those performed as a professional photographer, which are not performed during
Employee’s work hours and not for the benefit of Employer, so long as such activities do not
interfere with his duties as an employee of Employer, as set forth above in Section 3 and are in
compliance with the terms, conditions and obligations of this Section 4 and Exhibit B, attached
hereto and incorporated herein by this reference.

     5. Confidentiality and Non-Disclosure. Employee shall not disclose any information
relating to Employer, its employees or customers, and information regarding the affairs or
operations of Employer, including Employer proprietary information, trade secrets, patents and
customer lists, to any third party or parties during or after the term of this Agreement, without
the prior written consent of Employer. Employee also shall not solicit, interfere with, or
endeavor to entice away from Employer any of its customers or sources of supply. In connection
with these obligations, Employee shall execute a Proprietary Information and Inventions Agreement
attached hereto as Exhibit B.

     6. Limitations on Authority. The limitations on the authority of Employee to bind
Employer with respect to agreements with third parties shall be in accordance with Employer’s
policies and procedures as amended from time to time.

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     7. Personnel Policies and Procedures. The Employer has established an Employee
Handbook setting forth policies and procedures of the Employer and retains the authority to amend
the provisions of the Employee Handbook and establish from time to time new or revised personnel
policies and procedures to be followed by its employees. Employee agrees to comply with the
Employee Handbook and any additional policies and procedures of the Employer. To the extent any
provisions in Employer’s Employee Handbook or other personnel policies and procedures differ with
the terms of this Agreement, the terms of this Agreement shall apply.

     8. Compensation.

          a. Salary. Employee shall be paid a base salary of One Hundred Fifty-Five Thousand
Dollars ($155,000.00) per year, subject to standard payroll deductions and withholdings, payable
bi-weekly pursuant to the payroll procedures regularly established, and amended, by the Employer
during the term of this Agreement.

          b. Stock Options and Warrants. As consideration for services rendered and in lieu of
additional compensation prior to this Agreement, Employer and Employee acknowledge that Employee
has been granted fully-paid warrants to purchase 42,500 shares of common stock in accordance with
the terms of that certain Warrant Agreement attached as Exhibit C. No further warrants shall be
granted as consideration for services after the Effective Date of this Agreement. In addition to
the warrants in lieu of compensation, Employee has been granted options to purchase 135,000 shares
of common stock on a vesting schedule set forth in that certain Stock Option Agreement, in the form
attached hereto as Exhibit D and incorporated herein by this reference.

          c. Additional Consideration.

               i. The parties acknowledge and agree that in consideration of the assignment by Employee of
all Rights in Proprietary Information to Employer created or produced by Employee or assigned to
Employee by a third party prior to commencement of this Agreement (as set forth in the Proprietary
Information and Inventions Agreement attached hereto as Exhibit B and executed by the parties as of
the date of this Agreement), Employee shall be granted warrants to purchase 25,000 shares of common
stock at an exercise price of $1.25 per share in accordance with the terms of that certain Warrant
Agreement attached hereto as Exhibit E and incorporated herein by this reference.

               ii. The parties acknowledge and agree that in consideration of the quality of the materials
created or produced by Employee and Employee’s efforts in promoting the brand name of the Company
to date through his creative efforts, Employee shall be granted warrants to purchase an additional
50,000 shares of common stock at an exercise price of $1.25 per share in accordance with the terms
of that certain Warrant Agreement attached hereto as Exhibit F and incorporated herein by this
reference

          d. Consideration for Prior Services. Employee agrees that all consulting services
rendered by Employee for the benefit of Company from and after March 25, 2004 through the date of
this Agreement have been fully paid to Employee or to any affiliate or agent of Employee, including
but not limited to Employee’s company, iCetera, LLC (“Affiliates”), and

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no consideration is due by Employer to Employee or any of Employee’s Affiliates for such
consulting services, including any activities provided by Employee consisting of creating motion
picture or still photography in any print or media format, as well as videotape, video disc,
digital and any other mechanical or electronic means of recording and reproducing images created or
produced on behalf of the Company and for its benefit.

     9. Fringe Benefits. Employee shall receive all such benefits for which Employee is
eligible and which are available to all similarly situated employees as set forth in the Employer’s
Employee Handbook and in accordance with all other policies and procedures of Employer regarding
benefits of employment, as modified from time to time.

     10. Paid Time Off. Employee shall be entitled to Paid Time Off (PTO) for which
Employee becomes eligible and which is available to all similarly situated employees as set forth
in the Employer’s Employee Handbook and in accordance with all other policies and procedures of
Employer regarding PTO and leave benefits, as modified from time to time. The parties agree that
Employee is hereby granted one hundred and seventy-three (173) hours of PTO; and shall be subject
on and after the date of this Agreement to all accrual requirements and limitations applicable to
employees whose date of hire is July 1, 2005.

     11. Expenses. Employer shall reimburse Employee for reasonable and necessary expenses
incurred by Employee in the ordinary course of business for Employer, in accordance with Employer’s
policies and procedures.

     12. Termination. This Agreement and Employee’s employment shall terminate upon the
happening of any one of the following events:

          a. Employee unilaterally elects to terminate employment with Employer by prior written notice;

          b. Circumstances occur that Employer determines in good faith make it impossible or
impractical for Employer to continue its business, or as a result of a slow-down in business, or
similar circumstance, Employer determines in good faith that Employee’s services are no longer
needed;

          c. The death of Employee;

          d. The disability of Employee (permanent disability shall exist if, in the sole opinion of
Employer, as determined in good faith, Employee suffers from a condition of mind or body that
prevents him, after reasonable accommodation by Employer, from further performance of the essential
functions of his position for a period of ninety (90) consecutive days in any twelve month period);

          e. Employee ceases to hold a valid and effective immigration visa, work permit, license(s) or
approvals required by any rule, regulation, law or the bylaws of Employer, that is/are a
prerequisite to Employee holding his position with Employer;

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          f. Employer provides Employee written notice that Employee’s employment is being discharged
for “good cause.” Employer has “good cause” to discharge Employee, for the reasons listed below:

               i. Employee fails or refuses to adequately and diligently perform the duties and
responsibilities of his position with Employer and fails or refuses to cure such performance
failure to Employer’s satisfaction within thirty (30) days after written notice thereof is given to
Employee by Employer; or

               ii. Employee fails or refuses to comply with the policies, standards and/or rules of Employer,
which Employer may from time to time establish or modify; or

               iii. Employee fails or refuses to act in accordance with any lawful direction or order of
Employer; or

               iv. It is determined that Employee has conducted himself in an unprofessional, unethical,
illegal or fraudulent manner, or has acted or failed to act in a manner detrimental to the
reputation, character or standing of Employer; including, but not limited to, theft or
misappropriation of Employer’s assets, engaging in discriminatory or harassing conduct, the filing
of false expense or related reports, or being convicted of (or pleading nolo contender to) a felony
or a misdemeanor involving moral turpitude; or

               v. Employee violates any term or condition of this Agreement;

          g. Employer completes a “Change of Control,” as defined below, and after which Employee’s
employment is terminated for any reason other than as set forth in Paragraphs 12(a), 12(c), l2(d),
12(e), or 12(t).

     “Change of Control” as used in this Agreement shall mean (a) the merger,
acquisition or consolidation between Employer and any other entity, regardless of
whether Employer is the surviving or disappearing entity; or (b) a sale or exchange
of all or substantially all of the assets of Employer; unless the shareholders of
record of Employer immediately prior to such acquisition or sale will, immediately
after such acquisition or sale (by virtue of securities issued as consideration for
such acquisition or sale or otherwise), hold at least fifty percent (50%) of the
voting securities of the surviving or acquiring entity;

          h. Employer gives Employee sixty (60) days prior written notice of its intent to terminate
this Agreement and Employee’s employment. At Employer’s option, Employer may terminate this
Agreement immediately upon the giving of written notice and provide Employee with 60-days pay in
lieu of notice;

     13. Obligations of Employee on Termination. Employee acknowledges and agrees that all
property, including keys, credit cards, books, manuals, records, notes, contracts, customer lists,
Proprietary Information or Company Materials (as defined in the Artes Medical USA, Inc. Proprietary
Information and Inventions Agreement attached hereto as Exhibit B), documents (in electronic, hard
copy or other media), copies of any of the foregoing, and any equipment furnished to Employee by
Employer, belong to Employer and shall be promptly returned to

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Employer upon termination of employment. Further, upon termination of employment, Employee
shall be deemed to have resigned from all offices and directorships then held with Employer.

     14. Obligations of Employer on Termination.

          a. Upon termination of this Agreement and Employee’s employment for any reason set forth in
Paragraphs 12(a), 12(c), 12(d), 12(e), or 12(f), Employer’s obligations to Employee under this
Agreement shall be limited to: (a) the prorated payment of Employee’s salary through the date of
termination to the extent not paid by then; (b) the payment of earned and accrued bonus and
incentive plan payments due Employee, if any, under any bonus or incentive plan in which Employee
participated prior to termination; (c) the payment of any unused accrued PTO through the date of
termination; and (d) the payment of any reimbursable business expenses that were documented by
Employee prior to the termination of this Agreement in accordance with Employer’s expense
reimbursement policies, and that were not reimbursed by Employer at the time of the termination of
this Agreement. As of the date of termination of this Agreement, Employer’s obligations to
Employee shall terminate and Employer shall have no further obligation to pay Employee, or
Employee’s estate, beneficiaries, or legal representatives any compensation or any other amounts
except as otherwise provided by law.

          b. Upon termination of this Agreement and Employee’s employment for any reason set forth in
Paragraphs 12(b), 12(g), or 12(h), Employer’s obligations to Employee under this Agreement shall be
limited to: (a) the prorated payment of Employee’s salary through the date of termination to the
extent not paid by then; (b) the payment of earned and accrued bonus and incentive plan payments
due Employee, if any, under any bonus or incentive plan in which Employee participated prior to
termination; (c) the payment of any unused accrued PTO through the date of termination; (d) the
payment of any reimbursable business expenses that were documented by Employee prior to the
termination of this Agreement in accordance with Employer’s expense reimbursement policies, and
that were not reimbursed by Employer at the time of the termination of this Agreement; and (e) upon
Employee’s execution and delivery to Employer of a full general release of claims against the
Company, the payment of a lump sum equal to three (3) months base salary at Employee’s then current
rate of compensation, less applicable withholdings and authorized deductions.

     15. Arbitration/Sole Remedy for Breach of Agreement. In the event of any dispute
between Employer and Employee concerning any aspect of the employment relationship, including any
disputes relating to termination, all such disputes shall be resolved by binding arbitration before
a single neutral arbitrator pursuant to the following terms. This provision shall supersede any
prior arbitration agreement, policy or understanding between the parties. The parties intend to
revoke any prior arbitration agreement.

          a. Claims Covered by the Agreement. Employee and Employer mutually consent to the
resolution by final and binding arbitration of any and all disputes, claims, demands, causes of
action, controversies — past, present or future — that either party could otherwise pursue in court
that arise from or relate in any way to Employee’s hiring, employment, or termination of Employee’s
employment with Employer, or any contracts or agreements between the parties. This includes any
claim by Employer against Employee and any claim by

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Employee against Employer, its directors, officers, employees, agents, partners, or pension or
benefit plans administrators or fiduciaries, or franchisors, or any parent, subsidiary or
affiliated company or corporation based on any state or federal law (including but not limited to
claims for employment discrimination, retaliation or harassment, or based on the California Labor
Code), as well as any common law claim (including claims for breach of contract, wrongful
discharge, defamation, misrepresentation, fraud, and infliction of emotional distress). This
Agreement does not affect Employee’s right to seek administrative relief from the United States
Equal Employment Opportunity Commission or the California Department of Fair Employment and
Housing. Further, this Agreement does not cover claims Employee may have for workers’
compensation, unemployment compensation benefits, state disability benefits, or claims under the
National Labor Relations Act. Nothing in this Agreement shall prohibit or limit the parties from
seeking provisional relief pursuant to California Code of Civil Procedure 1281.8 or any similar
statute of an applicable jurisdiction.

          b. Required Notice of Claims and Statute of Limitations. Arbitration may be initiated
by Employee by serving or mailing a written notice to the Chief Executive Officer of Employer.
Arbitration may be initiated by Employer by serving or mailing a written notice to Employee at his
last known address. The notice shall identify and describe the nature of all claims asserted and
the facts upon which such claims are based. The written notice shall be served or mailed within
the applicable statute of limitations period set forth by federal or state law.

          c. Arbitration Procedures.

               i. After demand for arbitration has been made by serving written notice under the terms of
Section 14(b) of this Agreement, the party demanding arbitration shall file a demand for
arbitration with the American Arbitration Association (“AAA”) in San Diego, California. The
arbitrator shall be selected from the AAA panel and the arbitration shall be conducted pursuant to
AAA policies and procedures. All rules governing the arbitration shall be the rules as set forth
by AAA.

               ii. The arbitrator shall apply the substantive law of the state of California, or federal law,
or both, as applicable to the claim(s) asserted.

               iii. Either party may file a motion for summary judgment with the arbitrator under the Federal
Rules of Civil Procedure. The arbitrator is entitled to resolve some or all of parties’ claims
through such a motion.

          d. Arbitration Decision. The arbitrator’s decision will be final and binding. A
party’s right to appeal the decision is limited to grounds provided under applicable federal or
state law.

          e. Arbitration Fees and Costs. Employer shall be responsible for the arbitrator’s
fees and costs. Except as provided by statute, each party shall be responsible for its own
attorneys’ fees.

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          f. Waiver of Jury Trial/Exclusive Remedy. Employee and Employer waive any
constitutional right to have any dispute between them decided by a court of law and/or by a jury in
a court proceeding and/or by any administrative agency.

     16. Successors and Assigns. The lights and obligations of Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of
Employer. Employee shall not be entitled to assign any of Employee’s rights or obligations under
this Agreement.

     17. Governing Law. This Agreement shall be interpreted, construed, governed and
enforced in accordance to the laws of the State of California.

     18. Amendments. No amendment or modification of the terms or conditions of this
Agreement shall be valid unless in writing and signed by the Parties hereto.

     19. Separate Terms/Severability. Each term, condition, covenant or provision of this
Agreement shall be viewed as separate and distinct, and in the event that any such term, covenant
or provision shall be held by a court or arbitrator of competent jurisdiction to be invalid,
unenforceable or void, the remaining provisions shall continue in full force and effect.

     20. Waiver. A waiver by either party of a breach of provision or provisions of this
Agreement shall not constitute a general waiver, or prejudice the other party’s right otherwise to
demand strict compliance with that provision or any other provisions in this Agreement.

     21. Notices. Any notice required or permitted to be given under this Agreement shall
be sufficient, if in writing, and personally delivered or sent by mail to Employee’s last known
residence address, or in the case of Employer, its principal place of business.

     22. Legal Counsel. Employee acknowledges that Employee has sought the advice of
independent counsel of Employee’s own choosing, or has declined to do so, with respect to this
Agreement. Employee further acknowledges that Employee fully understands Employee’s legal rights
and obligations under this Agreement, and that Employee has read and understands this Agreement.

     23. 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 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.

[the remainder of this page intentionally left blank]

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     IN WITNESS HEREOF, the parties have executed this Agreement as of the date set forth above.

	 	 	 	 	 
	 	 	/s/ Harald Schreiber
	 	 	 
	 	 	Harald T. Schreiber
	 
	 	 	 	 
	 	 	Artes Medical USA, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Stefan Lemperle
	 

	 	 	 	 
	 

	 	 	 	     Stefan Lemperle
	 

	 	 	 	     Chief Executive Officer

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Exhibit A

(Duties of Chief Creative Officer)

Employee’s duties shall include, but are not limited to, the following:

	 	1.	 	Develop, define and manage the global creative direction of Artes Medical (“the
Company”) and any affiliates;
	 
	 	2.	 	Define the corporate identity and guidelines for the Company and its brand;

	 
	 	3.	 	Execute the visual language of the Artes brand throughout the Company and product line;
	 
	 	4.	 	Develop, define and direct the execution of all visual branding on all Company
collateral materials;
	 
	 	5.	 	Identify, research, develop and propose new and improved ways to communicate the
branding mission of the Company and increase its brand value;
	 
	 	6.	 	Oversee and coordinate that the Company’s corporate branding mission will be upheld in
the activities of the Company;
	 
	 	7.	 	Interact and cooperate closely with the marketing department of the Company, exchanging
ideas on a regular basis and collaborate to ensure brand consistency and integration with
the Company’s strategic plans;
	 
	 	8.	 	Work closely with marketing strategic objectives which are aimed at improving the
Company’s ability to assist and respond to global market requirements.
	 
	 	9.	 	Activities consisting of creating motion picture or still photography in any print or
media format, as well as videotape, video disc, digital and any other mechanical or
electronic means of recording and reproducing images created or produced on behalf of the
Company and for its exclusive, proprietary and perpetual benefit. This includes images or
likenesses of any person made for or on behalf of the Company related in any way to the
business of the Company.

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Exhibit B

(Proprietary Information and Inventions Agreement)

Intentionally omitted.

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Exhibit C

(Warrant to Purchase Common Stock Agreement)

Intentionally omitted.

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Exhibit D

(Stock Option Agreement)

Intentionally omitted.

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Exhibit E

(Warrant to Purchase Common Stock Agreement)

Intentionally omitted.

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EXHIBIT
10.14

SEPARATION AGREEMENT

     This Separation Agreement (this “Agreement”) is made and entered into by and between Gottfried
Lemperle, M.D. (“Dr. Lemperle”) and Artes Medical, Inc. (the “Company”), 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, agents, attorneys, employees and assigns.

RECITALS

     A. Dr. Lemperle has been serving as an employee, officer and director of the Company.

     B. Dr. Lemperle wishes to retire from the Company and end his service as an employee, officer
and director of the Company pursuant to the terms and conditions of this Agreement.

     C. The Company wishes to retain Dr. Lemperle as a consultant, and Dr. Lemperle wishes to
provide consulting services to the Company, on the terms and conditions of this Agreement.

AGREEMENT

     THEREFORE, in consideration of the mutual promises and covenants contained herein, it is
hereby agreed by and between Dr. Lemperle, on the one hand, and the Company, on the other, as
follows:

     1. Retirement and Resignation. Dr. Lemperle hereby confirms his retirement from the
Company, effective March 15, 2006 (the “Retirement Date”), and his resignation from his position as
Chief Scientific Officer, each resignation effective as of the Retirement Date. Dr. Lemperle also
acknowledges his resignation from his position as a director on the Company’s Board of Directors
tendered to the Secretary of the Company with an effective date of March 18, 2006. The parties
acknowledge that this Agreement and the terms and conditions herein are entered into by the parties
in connection with the matters arising out of the litigation entitled Elizabeth Sandor v. Artes
Medical USA, Inc. et.al., Case No. GIC 852056 in the Superior Court of the State of California for
the County of San Diego (“Litigation”) and without any admission of any liability whatsoever by any
party to the Litigation..

2. Wages, Vacation Time and Expenses Paid and Bonus to be Paid.

          2.1 Dr. Lemperle hereby agrees that the Company has paid him all of his wages and all of his
accrued and unused vacation time through the Retirement Date, subject to federal and state
withholding and other applicable taxes, and has been reimbursed by the Company for all reimbursable
business expenses through the Retirement Date.

          2.2 Contingent upon this Agreement becoming effective as provided in Section 28 of this
Agreement and upon Dr. Lemperle’s execution and delivery of the Voting Agreement set forth in
Section 5, the Company shall pay Dr. Lemperle $70,000.00 as a bonus
 

 

 

payment related to fiscal year 2005, subject to federal and state withholding and other
applicable taxes (the “Bonus”). Dr. Lemperle agrees that upon payment of the Bonus by the Company,
he is not entitled to any other bonus or other compensation payments from the Company through the
Retirement Date.

3. Consulting Agreement.

          3.1 Term. Subject to its rights to terminate this Agreement earlier pursuant to the
termination provisions contained in Section 10 hereof, and contingent upon this Agreement becoming
effective as provided in Section 28 of this Agreement and upon Dr. Lemperle’s execution and
delivery of the Voting Agreement set forth in Section 5, the Company agrees that commencing upon
the Retirement Date, and continuing for a period of up to twenty-four (24) months thereafter, Dr.
Lemperle will make himself available as an independent contractor consultant (the “Consulting
Period”). The Consulting Period shall automatically extend for an additional twelve (12) month
period unless the Board makes a good faith determination that one of the conditions set forth in
Section 10.2 has occurred during the initial Consulting Period (“Extended Consulting Period”).
This Agreement shall automatically terminate at the end of the Extended Consulting Period unless
extended further by the mutual agreement of the parties hereto in writing, which writing shall set
forth the terms and conditions (including the compensation payable to Dr. Lemperle for his
consulting services) that apply to such an extension of the Extended Consulting Period. As used
herein, Consulting Period shall include any extensions of the initial Consulting Period.

          3.2 Independent Contractor. Dr. Lemperle acknowledges that he is an independent
contractor, is not an agent or employee of the Company, is not entitled to any Company employment
rights or benefits and is not authorized to act on behalf of the Company, and he agrees not to take
any actions (directly or indirectly) to attempt to bind the Company. Dr. Lemperle shall be solely
responsible for any and all of his tax obligations, including but not limited to, all city, state
and federal income taxes, social security withholding tax and other self employment tax resulting
from the payments set forth in this Agreement. In the event that any taxing authority seeks to
collect taxes, interest and/or penalties from the Company on the consulting compensation paid to
Dr. Lemperle under this Agreement, Dr. Lemperle will hold the Company harmless from any and all
claims for such taxes, interest and/or penalties and will indemnify the Company against any such
claims. The Company shall not dictate the work hours of Dr. Lemperle during the term of this
Agreement. The parties hereby acknowledge and agree that the Company shall have no right to
control the manner, means or method by which Dr. Lemperle performs the services called for by this
Agreement. Rather, the Company shall be entitled only to direct Dr. Lemperle with respect to the
elements of services to be performed by Dr. Lemperle and the results to be derived by the Company,
to inform Dr. Lemperle as to where and when such services shall be performed, to limit and identify
the persons at the Company with whom Dr. Lemperle may communicate, and to review and assess the
performance of such services by Dr. Lemperle for the purposes of assuring that such services have
been performed and confirming that such results were satisfactory. The Company shall be entitled
to exercise broad general power of supervision and control over the results of work performed by
Dr. Lemperle to ensure satisfactory performance, including the right to inspect, the right to stop
work, the right to make suggestions or recommendations as to the details of the work, and the right
to propose modifications to the work.

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          3.3 Compensation. During the Consulting Period, the Company shall pay to Dr. Lemperle
the gross sum of $16,666.67 per month. The monthly consulting fee shall be due and payable to Dr.
Lemperle upon the completion of each month of consulting work, with the first consulting
compensation payment payable to Dr. Lemperle on the one month anniversary of the Retirement Date,
and subsequent payments due on such day of each month thereafter for the term of this Agreement.

          3.4 Duties. During the Consulting Period, Dr. Lemperle agrees to make himself
available to provide advice and input on the Company business, technical and scientific matters, as
may be requested of him from time to time by the Company’s Board of Directors (the “Board”) or the
Company’s President. Dr. Lemperle shall report only to the President, unless specifically directed
otherwise by the Executive Chairman of the Board. It is understood and agreed that the duties
assigned to Dr. Lemperle shall relate to (a) introducing the Company to the contacts and
relationships between Dr. Lemperle and any existing or prospective customers, accounts, business
partners (including doctors), investors and stockholders of the Company, (b) sales, marketing and
distribution of the Company’s products, (c) technical and scientific assistance with the Company’s
products and technology and (d) other business, technical and scientific matters that the Executive
Chairman or the President shall reasonably request to be performed by Dr. Lemperle.

          3.5 Time Commitment. During the Consulting Period, Dr. Lemperle shall make himself
available to the Company in San Diego, California to perform consulting duties on an as-needed
basis as requested by the Company (which may be up to 40 hours per week). The Company agrees to
provide Dr. Lemperle with reasonable advance notice of its need for his services, particularly if
the services will require Dr. Lemperle to travel outside of San Diego County, California. Dr.
Lemperle agrees to provide the Company with at least one week’s advance notice of any vacation or
other planned absence in which Dr. Lemperle will be unavailable to render consulting services for
the Company.

          3.6 Company Policies and Code of Ethics. Although not an employee of the Company, Dr.
Lemperle agrees to familiarize himself with and to comply with all Company policies and procedures
during the Consulting Period, including the Company’s Code of Ethics (as such policies and
procedures may be amended from time to time).

          3.7 Business Expenses. It is expressly understood and agreed that during the
Consulting Period, Dr. Lemperle shall not incur any business expenses without the prior written
approval of the Executive Chairman or the Company’s Chief Financial Officer. To the extent such
business expenses have been approved in advance, the Company shall reimburse Dr. Lemperle for
reasonable business expenses incurred by him as a necessary consequence of his performance of his
consulting duties on the Company’s behalf. Dr. Lemperle shall submit written requests for
reimbursement of said business expenses, together with supporting receipts, on or before the last
day of each month of the Consulting Period. Reimbursement of Dr. Lemperle’s business expenses
shall be paid in the time and manner which are consistent with the Company’s policy concerning
employee business expenses.

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     4.Equity Holdings.

          4.1 Stock. Dr. Lemperle hereby acknowledges that he holds 1,000,000 shares of Common
Stock, 161,243 shares of Series C-1 Preferred Stock and 70,761 shares of Series D Preferred Stock.

          4.2 Options. In addition, The Company has granted Dr. Lemperle the following options
(the “Stock Options”) to purchase the indicated shares of Common Stock at the indicated exercise
price:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number of
	 	 	 	 	 	 	Vested Shares
	Option Grant	 	Number of	 	Per Share	 	as of March 31,
	     Date	 	Shares	 	Exercise Price	 	2006
	6/27/03
	 	 	100,000	 	 	$	1.50	 	 	 	68,739	 
	9/15/04
	 	 	300,000	 	 	$	1.00	 	 	 	112,500	 
	Total:
	 	 	400,000	 	 	 	 	 	 	 	181,239	 

     Dr. Lemperle understands and agrees that as of the Retirement Date he has vested in an
aggregate of 181,839 shares of Common Stock under his Stock Options as set forth in the table
above.

          4.3 Warrants. In addition, the Company has issued Dr. Lemperle the following warrants
(the “Warrants”) to purchase the indicated shares at the indicated exercise price:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warrant Issuance	 	 	 	 	 	Number of	 	Per Share
	     Date	 	Type of Stock	 	Shares	 	Exercise Price
	7/26/02
	 	Series C-1	 	 	150,000	 	 	$	1.00	 
	6/30/04
	 	Common	 	 	32,000	 	 	$	1.25	 
	Total:
	 	 	 	 	 	 	182,000	 	 	 	 	 

          4.4 Acknowledgement. Dr. Lemperle acknowledges and agrees that the Common Stock,
Series C-1 Preferred Stock listed in Section 4.1, the Stock Options to acquire shares of Common
Stock listed in Section 4.2 and Warrants to purchase shares of Common Stock and Series C-1
Preferred Stock listed in Section 4.3 sets forth Dr. Lemperle’s, including Dr. Lemperle’s spouse,
executors, administrators, assigns and successors, entire interest in or right to acquire the
capital stock of the Company (or rights or other securities exercisable or

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convertible into the capital stock of the Company), and that neither he nor his spouse,
executors, administrators, assigns and successors has any right to acquire or purchase any
additional shares of capital stock or rights or other securities exercisable or convertible for
capital stock (collectively, the “Securities”).

          4.5 Warrant Amendment and Vesting During Consulting Period. In exchange for the
general release given and the other promises and covenants made by Dr. Lemperle under this
Agreement, and contingent upon this Agreement becoming effective as provided in Section 28 of this
Agreement, the Company agrees:

               (i) to extend the term of the Warrant to purchase up to 54,167 shares of Common Stock at an
exercise price of $1.50 per share held by Dr. Lemperle until the close of business on March 27,
2006.

               (ii) to provide that Dr. Lemperle will be deemed to be in “Service” to the Company during the
Consulting Period as such term is defined under the Stock Options and the Warrants, and as a
result, Dr. Lemperle will continue to vest on a monthly basis as provided in the Stock Options and
the Warrants during the Consulting Period.

               (iii) to amend the terms of the Stock Options to provide that Former Employee/Consultant will
have three hundred sixty five (365) days from the end of the Consulting Period in which to exercise
all or a portion of the Stock Options in which he has acquired a vested interest as of the end of
the Consulting Period.

     Dr. Lemperle acknowledges and agrees that by extending 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 Option
(“ISO”) to Non-Qualified Stock Options (“NSO”). Dr. Lemperle further acknowledges that ISOs and
NSOs are treated differently under the tax laws (e.g., upon exercise of an NSO, the exercising
party must pay tax on the spread between the then fair market value of the Company’s Common Stock
and the exercise price paid for the stock), and that he is responsible for seeking his own legal
and tax advice on such matters.

     5. Voting Agreement. In exchange for the general release given and the other promises
and covenants made by the Company under this Agreement, and contingent upon this Agreement becoming
effective as provided in Section 28 of this Agreement, Dr. Lemperle agrees to execute and deliver
to the Company the Voting Agreement attached hereto as Exhibit A related to the Securities.

     6. Health Benefits. Dr. Lemperle acknowledges that he has been provided with forms by
which he may maintain his and his eligible dependents’ participation in the Company’s group health
insurance plan pursuant to the terms of the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”). In exchange for the general release given and the other promises and covenants made by
Dr. Lemperle under this Agreement, and contingent upon this Agreement becoming effective as
provided in Section 28 of this Agreement, the Company agrees that if Dr. Lemperle timely elects to
continue his participation in the Company’s group health insurance plans pursuant to COBRA, then
the Company shall pay the COBRA premium(s) on

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Dr. Lemperle’s behalf for twelve (12) months, provided Dr. Lemperle does not otherwise become
eligible to participate in another employer’s group insurance plan. If Dr. Lemperle desires to
continue his participation beyond the end of the Consulting Period, and is eligible to continue his
participation pursuant to COBRA, he understands and 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 Dr. Lemperle to continue participating in any life insurance, long-term disability
benefits, or accidental death and dismemberment plans maintained by the Company after the
Retirement Date. 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.

     7. Contractual Obligations

          7.1 Existing Agreements. Dr. Lemperle acknowledges that he is a party to and bound by
the terms and conditions of that certain Confidentiality Agreement and Employee/Officer/Consultant
Invention Agreement by and between the Company and him, dated April 22, 2005 (the “Confidentiality
Agreement”). Dr. Lemperle also acknowledges that he is a party to and bound by the terms and
conditions of agreements related to the Company’s intellectual property (including patent
applications) and Dr. Lemperle’s assignment of his intellectual property rights to the Company
(collectively, the “Intellectual Property Agreements”).

          7.2 Remedies. Dr. Lemperle understands and agrees that the Confidentiality Agreement
and the Intellectual Property Agreements and his duties thereunder, survive the termination of his
employment with the Company and continue to remain in effect during the Consulting Period, and will
survive the expiration or termination of the Consulting Period and this Agreement. Dr. Lemperle
acknowledges that a remedy at law for any breach or threatened breach by him of the provisions of
the Confidentiality Agreement or the Intellectual Property Agreements would be inadequate, and he
therefore agrees that the Company shall be entitled to injunctive relief in case of any such breach
or threatened breach.

          7.3 Further Assurances. Dr. Lemperle agrees to perform, during and after the
Consulting Period, all acts deemed necessary or desirable by the Company to permit and assist it,
at the Company’s expense, in obtaining and enforcing patents, copyrights or other rights on any
inventions covered by the Confidentiality Agreement and the Intellectual Property Agreements. Such
acts may include, but are not limited to, execution of documents and assistance or cooperation in
legal proceedings. Dr. Lemperle hereby irrevocably designates and appoints the Company and its
duly authorized officers and agents, as his agents and attorney-in-fact to act for and on his
behalf and instead of Dr. Lemperle, to execute and file any applications or related findings and to
do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights
or other rights thereon with the same legal force and effect as if executed by him.

     8. Trade Secrets and Confidential Information/Non-Competition.

          8.1 Proprietary Information and Inventions Agreement. In exchange for the general
release given and the other promises and covenants made by the Company under this
 

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Agreement, and contingent upon this Agreement becoming effective as provided in Section 28 of
this Agreement, Dr. Lemperle agrees to execute and deliver to the Company the Proprietary
Information and Inventions Agreement attached hereto as Exhibit B (the “Proprietary
Agreement”).

          8.2 No Competition During Consulting Period. During the Consulting Period, Dr.
Lemperle agrees that he will not, directly or indirectly, whether as an officer, director,
stockholder, partner, proprietor, associate, representative, consultant, or in any capacity
whatsoever engage in, become financially interested in, be employed by, provide services to, or
have any business connection with, any other person, corporation, firm, partnership or other entity
whatsoever which competes directly or indirectly with the Company throughout the world, in any line
of business engaged in (or planned to be engaged in) by the Company. Dr. Lemperle agrees that if
he is contemplating an affiliation of any sort with any other person, corporation, firm,
partnership or other entity, he shall notify the Company in writing so that a determination may be
made as to whether such person, corporation, firm, partnership or other entity competes directly or
indirectly with the Company. Any such determination will be made by the Board in good faith.
However, notwithstanding anything above to the contrary, Dr. Lemperle may own, as a passive
investor, securities of any publicly traded competitor corporation, so long as his direct holdings
in any one such corporation shall not in the aggregate constitute more than 1% of the voting stock
of such corporation.

          8.3 Savings Clause. If any restriction set forth above within this Section is held to
be unreasonable, then Dr. Lemperle agrees, and hereby submits, to the reduction and limitation of
such prohibition to such area or period as shall be deemed reasonable. Dr. Lemperle agrees that
during the Consulting Period, he will not engage in any employment, business, or activity that is
in any way competitive with the business or proposed business of the Company, and he will not
assist any other person or organization in competing with the Company or in preparing to engage in
competition with the business or proposed business of the Company.

          8.4 Injunctive Relief. Dr. Lemperle expressly agrees that the covenants set forth in
this Section 8 are reasonable and necessary to protect the Company and its legitimate business
interests, and to prevent the unauthorized dissemination of confidential information to competitors
of the Company. Dr. Lemperle also agrees that the Company will be irreparably harmed and that
damages alone cannot adequately compensate the Company if there is a violation of the provisions of
this Section 8 by Dr. Lemperle, and that injunctive relief against Dr. Lemperle is essential for
the protection of the Company. Therefore, in the event of any such breach, it is agreed that, in
addition to any other remedies available, the Company shall be entitled as a matter of right to
injunctive relief in any court of competent jurisdiction, plus attorneys’ fees actually incurred
for the securing of such relief.

     9. Non-Solicitation. For two (2) years immediately following the expiration or
termination of the Consulting Period for any or no reason, Dr. Lemperle agrees not to interfere
with the business of the Company by soliciting, inducing, or otherwise causing (i) any employee or
consultant of the Company to terminate his or her employment or engagement with the Company, or to
reduce his or her time commitment or scope of services provided to the Company, or (ii) any
customer or client of the Company to purchase or obtain the products or

-7-

 

services of any firm or business organization which competes with the Company. The foregoing
restrictions shall apply to Dr. Lemperle regardless of whether he is acting directly or indirectly,
alone or in concert with others. Dr. Lemperle understands and agrees that he cannot and will not
do indirectly that which he cannot do directly.

     10. Termination Provisions.

          10.1 Company’s Right to Terminate. The Company shall have the right to terminate the
Consulting Period and Dr. Lemperle’s provision of services under this Agreement for cause at any
time, with or without notice.

          10.2 Termination For Cause. In the event that the Company terminates Dr. Lemperle’s
services for cause, as defined hereafter, Dr. Lemperle’s consulting compensation shall cease
immediately. A termination by the Company for “cause” shall mean a termination based on the
Board’s good faith and reasonable belief that one or more of the following has occurred:

               (i) Dr. Lemperle is charged with any felony or any crime involving dishonesty or moral
turpitude.

               (ii) Dr. Lemperle’s participation in any fraud against the Company.

               (iii) Dr. Lemperle’s breach of the Company’s policies and procedures, including any breach of
the Company’s Code of Ethics.

               (iv) Dr. Lemperle’s breach of any obligations or duties owed to the Company, whether arising
under this Agreement or any other binding agreement with the Company, including but not limited to
the Confidentiality Agreement and any Intellectual Property Agreement. If Dr. Lemperle’s breach is
curable, it is agreed that the Company will provide Dr. Lemperle with written notice of said
breach, and seven (7) business days within which to cure said breach.

               (v) Dr. Lemperle’s unauthorized disclosure or use of Company proprietary or confidential
information. It is expressly understood and agreed by the parties that an unauthorized disclosure
or use of Company proprietary or confidential information shall not be considered a “curable
breach”, as described in subsection 10.2(iv) above.

               (vi) Dr. Lemperle’s violation of any of the non-competition provisions of this Agreement. It
is expressly understood and agreed by the parties that any violation of the non-competition
provisions of this Agreement shall not be considered a “curable breach”, as described in subsection
10.2(iv) above.

               (vii) Dr. Lemperle’s disparagement of the Company or any person affiliated with the Company,
including its officers, directors, employees and consultants.

               (viii) Dr. Lemperle’s failure to make himself available in San Diego, California at the
Company’s reasonable request to provide consulting services hereunder.

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          10.3 Termination Other Than For Cause. In the event that the Company terminates Dr.
Lemperle’s services for reasons other than those which constitute “cause”, as defined above, prior
to the natural expiration of the Consulting Period, then the Company shall pay to Dr. Lemperle six
(6) months of his consulting fees set forth in Section 3.3 (the “Termination Payments”), contingent
upon Dr. Lemperle’s execution of a new general release of all claims and nondisparagement
agreement. At the Company’s option, the Termination Payments may be paid to Dr. Lemperle in a lump
sum or in equal monthly installments over a six (6) month period.

     11. Outside Activities. Except as prohibited and/or limited by the provisions of
Sections 3, 7, 8 and 9 above, it is expressly understood and agreed that during the Consulting
Period, Dr. Lemperle may accept other employment. Dr. Lemperle may also engage in civic and
not-for-profit activities, except as limited by the provisions of Sections 3, 7, 8 and 9.

     12. Nondisparagement. Dr. 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 or the Releasees (as defined in Section 13 below).

     13. General Release.

          13.1 General Release. In consideration of the mutual promises and covenants contained
herein, Dr. 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 each of their respective
fiduciaries, predecessors, successors, officers, directors, stockholders, attorneys, agents,
employees and assigns (collectively, the “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
Agreement, including, without limitation, any and all claims, liabilities and causes of action
arising out of or relating to Dr. Lemperle’s equity ownership in the Company, Dr. Lemperle’s
employment with the Company or the cessation of that employment, Dr. Lemperle’s assignment of
intellectual property to the Company, or Dr. Lemperle’s service as an officer or director of the
Company or the cessation of that service.

          13.2 Knowing Waiver of Employment Related Claims. Dr. 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

-9-

 

employment, conditions of employment (including wage and hour laws) and/or employment
discrimination.

          13.3 Waiver of Civil Code § 1542. Dr. 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.”

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

     14. Severability of Release Provisions. The parties agree that if any provision of
the release given by Dr. Lemperle 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.

     15. Promise to Refrain from Suit or Administrative Action. Dr. 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. In the
event of a breach of this provision which shall constitute “cause” as defined above in Section 10.2
(iv) , the Company may, in its sole discretion, immediately terminate this Consulting Agreement and
Dr. Lemperle’s consulting compensation hereunder shall cease immediately upon such termination.

     16. Confidentiality of Agreement. Dr. Lemperle promises and agrees that, unless
compelled by legal process, he will not disclose to others and will keep confidential both the fact
of and the terms of this Agreement, including the amounts referred to in this Agreement, except
that he may disclose this information to his spouse and to his attorneys, accountants and other
professional advisors to whom the disclosure is necessary to accomplish the purposes for which Dr.
Lemperle has consulted such professional advisors. Dr. Lemperle expressly promises and agrees
that, unless compelled by legal process, he will not disclose to any present or former employees of
the Company the fact or the terms of this Agreement.

     17. Integrated Agreement. The parties acknowledge and agree that no promises or
representations were made to them concerning the subject matter of this Agreement which do not
appear written herein and that this Agreement contains the entire agreement of the parties on the
subject matter thereof. The parties further acknowledge and agree that parol evidence shall not be
required to interpret the intent of the parties.

     18. Voluntary Execution. The parties hereby acknowledge that they have read and
understand this Agreement and that they sign this Agreement voluntarily and without coercion.

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     19. Waiver, Amendment and Modification of Agreement. 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.

     20. Representation by Counsel. The parties acknowledge that they have the right to
have been represented in by counsel of their own choosing. Dr. Lemperle further acknowledges and
agrees that Heller Ehrman LLP (“Heller Ehrman”) is legal counsel for the Company solely, and that
he is not relying on the Company or Heller Ehrman for legal advice regarding this Agreement. The
parties further 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, 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.

     21. California Law. The parties agree that this Agreement and its terms shall be
construed under California law.

     22. Drafting. The parties agree that this Agreement shall be construed without regard
to the drafter of the same and shall be construed as though each party to this Agreement
participated equally in the preparation and drafting of this Agreement.

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

     24. Return of Company Property. Dr. Lemperle has returned to the Company all of his
keys to the Company’s premises and his Company laptop. It is understood and agreed that Dr.
Lemperle shall return all other property in his possession which belongs to the Company immediately
upon demand therefor. Dr. Lemperle specifically promises and agrees that he shall not retain
copies of any company documents or files following the termination of this Agreement.

     25. Attorneys’ Fees. Each party shall be responsible for its own legal fees incurred
in connection with the entering into of this Agreement.

     26. Period to Consider Terms of Agreement. Dr. Lemperle acknowledges that this
Agreement was first presented to him on March 15, 2006, that the terms of this Agreement have been
negotiated by counsel for both parties, and that he is entitled to have 21 days’ time in which to
consider the Agreement. Dr. Lemperle acknowledges that he understands that he has the right to
obtain the advice and counsel from the legal representative of his choice, and that he executes
this Agreement having had sufficient time within which to consider its terms. Dr. Lemperle
represents that if he executes this Agreement before 21 days have elapsed, he does so voluntarily,
and that he voluntarily waives any remaining consideration period.

     27. Revocation of Agreement. Dr. Lemperle understands that after executing this
Agreement, he has the right to revoke it within seven (7) days after his execution of it. Dr.

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Lemperle understands that this Agreement will not become effective and enforceable unless the
seven day revocation period passes and Dr. Lemperle does not revoke the Agreement in writing. Dr.
Lemperle understands that this Agreement may not be revoked after the seven day revocation period
has passed. Dr. Lemperle understands that any revocation of this Agreement must be made in writing
and delivered to the Company (to the attention of Karla Kelly) within the seven day period, and
that if he does so revoke the Agreement, he shall not be entitled to receive any of the benefits
described herein.

     28. Effective Date. This Agreement shall become effective on the eighth (8th) day
after execution by Dr. Lemperle, so long as Dr. Lemperle has not revoked it within the time and in
the manner specified in Section 27 of this Agreement.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates below:

	 	 	 	 	 
	 	 	 
	Dated:      3/16/06     , 2006 	
/s/ Gottfried Lemperle
 	 
	 	Gottfried Lemperle, M.D. 	 
	 	 	 
	 
	 	ARTES MEDICAL, INC.

 	 
	Dated:      3/16/06     , 2006 	By  /s/ Christopher Reinhard

	 
	 	      Christopher J. Reinhard 	 
	 	      Executive Chairman of the Board 	 
	 

[SIGNATURE PAGE TO SEPARATION AGREEMENT]

-13-

 

Exhibit A

Voting Agreement

 

 

VOTING AGREEMENT

     This Voting Agreement (this “Agreement”) is entered into as of March 15, 2006 (the “Effective
Date”), by and between Artes Medical, Inc., a Delaware corporation ( “Artes Medical”), and
Gottfried Lemperle, M.D., an individual (“Dr. Lemperle”).

BACKGROUND

     A This Voting Agreement is executed and delivered by the parties hereto in connection with
that certain Separation Agreement between Artes Medical and Dr. Lemperle (the “Separation
Agreement”).

     B. As of the Effective Date, Dr. Lemperle owns or holds the securities of Artes Medical set
forth on Exhibit A attached hereto (collectively, the “Securities”). The Securities and
all shares of voting stock (including any other securities with voting rights) of Artes Medical
that may hereafter be acquired or beneficially owned (directly or indirectly) by Dr. Lemperle are
collectively referred to herein as the “Voting Shares.”

     C. The obligations of Artes Medical in the Separation Agreement are conditioned upon the
execution and delivery of this Agreement.

     D. To induce Artes Medical to consummate the transactions contemplated in the Separation
Agreement, Dr. Lemperle desires to provide for the voting of the Voting Shares in accordance with
the agreements, terms and conditions set forth in this Agreement.

AGREEMENT

     In consideration of the mutual promises and covenants set forth herein and in the Separation
Agreement, the parties hereby agree as follows:

     29. Voting of Shares. During the term of this Agreement, Dr. Lemperle hereby unconditionally
agrees to vote all of the Voting Shares held by or beneficially owned (directly or indirectly) by
Dr. Lemperle in the manner directed by the majority of the board of directors of Artes Medical in
any election of directors and upon any and all matters in question (including, but not limited to,
waivers of contractual or statutory rights) which may be brought before the stockholders of Artes
Medical (or any class(es) or series of stockholders of Artes Medical) at any stockholders’ meeting
or by other means for consent, including any written consent (including, waivers of contractual or
statutory rights) of stockholders.

     30. Successors in Interest. The provisions of this Agreement shall be binding upon the
successors in interest to any of the Voting Shares. Dr. Lemperle shall not transfer any of the
Voting Shares unless and until the person to whom such Voting Shares are to be transferred shall
have executed a written agreement, substantially in the form of this Agreement, pursuant to which
such person becomes a party to this Agreement and agrees to be bound by all the provisions hereof
as if such person was a party hereunder.

1

 

     31. Legend.

          (a) Each certificate representing any of the Voting Shares shall bear a legend (the “Legend”)
reading as follows:

     “THE SHARES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS OF A VOTING AGREEMENT (A COPY OF
WHICH MAY BE OBTAINED WITHOUT CHARGE FROM THE ISSUER). BY ACCEPTING ANY INTEREST IN SUCH
SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND
BY ALL THE PROVISIONS OF SUCH VOTING AGREEMENT.”

          (b) Except as otherwise provided herein, Artes Medical agrees that, during the term of this
Agreement, it will not remove, and will not permit to be removed (upon registration of transfer,
reissuance or otherwise), the Legend from any such certificate and will place, or cause to be
placed, the Legend on any new certificate issued to represent the Voting Shares theretofore
represented by a certificate carrying the Legend.

     32. Termination. This Agreement shall terminate upon the earlier of (i) ten years from the
Effective Date; or (ii) the closing date upon which Artes Medical consummates its first sale of its
Common Stock in a firm commitment underwritten public offering pursuant to a registration statement
under the Securities Act of 1933, as amended.

     33. Further Assurances. Each of the parties hereto shall execute and deliver all additional
documents and instruments and shall do any and all acts and things reasonably requested in
connection with the performance of its obligations undertaken in this Agreement.

     34. Stock Splits, Stock Dividends, Etc. In the event of a stock split, stock dividend,
recapitalization, reorganization or the like, any securities issued with respect to the Voting
Shares shall become subject to this Agreement and shall be endorsed with the legend set forth in
Section 3 hereof.

     35. Representations. Dr. Lemperle hereby represents and warrants that: (a) the execution,
delivery and performance of this Agreement and any instrument required hereunder are not in
conflict with the terms of any instrument or agreement to which he is a party or by which he is
bound or affected; (b) this Agreement is a legal, valid and binding agreement of Dr. Lemperle,
enforceable against Dr. Lemperle in accordance with its terms; and (c) Dr. Lemperle will not take
any action inconsistent with the purposes of this Agreement.

     36. Enforceability/Severability. The parties hereto agree that each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid under applicable law.
If any provision of this Agreement shall nevertheless be held to be prohibited by or invalid under
applicable law, (a) such provision shall be prohibited or invalid only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Agreement and (b) the parties shall, to the extent permissible by applicable
law, amend this Agreement, or enter into a voting trust agreement under which the Voting Shares

2

 

shall be transferred to the voting trust created thereby, so as to make effective and
enforceable the intent of this Agreement.

     37. Governing Law. This Agreement will be governed by and construed under the laws of the
State of California as applied to agreements among California residents entered into and to be
performed entirely within California.

     38. Counterparts. This Agreement may be executed in one or more counterparts and the
signatures delivered by telecopy, each of which shall be deemed an original, with the same effect
as if the signatures were upon the same instrument and delivered in person.

     39. Notices. All notices and other communications required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the party to be
notified; (b) when sent by confirmed telex or facsimile if sent during normal business hours of the
recipient or, if not sent during normal business hours, then on the next business day; (c) three
days after having been sent by registered or certified mail, return receipt requested, postage
prepaid; or (d) one day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt.

     40. Equitable Remedies. The parties acknowledge and agree that the legal remedies available
to the parties in the event any party violates the covenants and agreements made in this Agreement
would be inadequate and that the parties shall be entitled, without posting any bond or other
security, to temporary, preliminary and permanent injunctive relief, specific performance and other
equitable remedies in the event of such a violation, in addition to any other remedies which the
parties may have at law or in equity.

     41. Amendments and Waivers. Any term hereof may be amended and the observance of any term
hereof may be waived only with the written consent of each of the parties. Any amendment or waiver
so effected will be binding upon any assignee or transferee thereof.

     42. Entire Agreement. This Agreement and the Separation Agreement contain the entire
understanding of the parties, and there are no further or other agreements or understandings,
written or oral, in effect between the parties relating to the subject matter hereof except as
expressly referred to herein.

[SIGNATURE PAGE TO FOLLOW]

3

 

     IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first
written above.

Artes Medical, Inc.

	 	 	 	 	 
	By:
	 	 	 	 
	

	 	 
	 
	 	 	 	 
	Name:

	 	Christopher J. Reinhard	 	 
	 
	 	 	 	 
	Title:

	 	Executive Chairman	 	 
	 
	 	 	 	 
	Dr. Gottfried Lemperle, an Individual	 	 
	 
	 	 	 	 
	 	 	 

[Signature Page to Voting Agreement]

 

 

Exhibit A

Securities

          42.1 Dr. Lemperle hereby acknowledges that he holds 1,000,000 shares of Common Stock, 161,243
shares of Series C-1 Preferred Stock and 70,761 shares of Series D Preferred Stock.

          42.2 In addition, the Company has granted Dr. Lemperle the following options (the “Stock
Options”) to purchase the indicated shares of Common Stock at the indicated exercise price:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number of
	 	 	 	 	 	 	Vested Shares
	Option Grant	 	Number of	 	Per Share	 	as of March 31,
	     Date	 	Shares	 	Exercise Price	 	2006
	6/27/03
	 	 	100,000	 	 	$	1.50	 	 	 	68,739	 
	9/15/94
	 	 	300,000	 	 	$	1.00	 	 	 	112,500	 
	Total:
	 	 	400,000	 	 	 	 	 	 	 	181,239	 

          42.3 In addition, the Company has issued Dr. Lemperle the following warrants (the “Warrants”)
to purchase the indicated shares at the indicated exercise price:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warrant Grant	 	 	 	Number of	 	Per Share	 	Number of
	      Date	 	Type of Stock	 	Shares	 	Exercise Price	 	Vested Shares	 
	7/26/02
	 	Series C-1	 	 	150,000	 	 	$	1.00	 	 	 	150,000	 
	6/30/04
	 	Common	 	 	32,000	 	 	$	1.25	 	 	 	32,000	 
	Total:
	 	 	 	 	 	 	182,000	 	 	 	 	 	 	 	182,000	 

 

 

Exhibit B

Proprietary Information and Inventions Agreement

Intentionally Omitted

B-1

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