Document:

exv10w11

 

EXHIBIT 10.11

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into and becomes effective as of June 1,
2004 (the “Effective Date”) by and between Artes Medical USA, Inc. (“Employer” or “Company”) and
Lawrence Braga (“Employee”).

RECITALS

     A. Employer is a Delaware corporation and is qualified to do business in the State of
California.

     B. Both Employer and Employee desire that Employee serve Employer in the capacity of Director
of Manufacturing and both parties desire to memorialize this relationship in writing.

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

AGREEMENT

     1. Employment. Employer hereby engages Employee to serve as Director of Manufacturing
and Employee hereby accepts such engagement upon the terms and conditions set forth herein.

     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. If the
Agreement is not terminated pursuant to Section 12, the Agreement shall continue from year to year
after February 1, 2008, unless either party to the Agreement gives written notice to the other of a
desire to change, amend, modify or terminate the Agreement, at least sixty (60) days prior to the
expiration of the then-current term of the Agreement.

     3. Duties. Employee is employed to serve as Director of Manufacturing and shall
perform such duties as are customarily performed by a Director of Manufacturing and such other
duties as the Chief Executive Officer assigns from time to time. Such duties shall include those
duties identified on Exhibit A, which is incorporated herein by this reference. Employee
acknowledges that he will report to the VP Manufacturing & Engineering who will be Employee’s
supervisor. As part of Employee’s duties, Employee acknowledges and understands that: (a) Employee
will devote his utmost knowledge and best skill to the performance of his duties; (b) Except as set
forth otherwise below, Employee will devote his full business time to the rendition of such
services, subject to absences for customary vacations and for temporary illness; and (c) 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, subject to Section 4 below.
The parties acknowledge that Employee will be permitted to continue consulting one day per week at
his current consulting position with THRASYS, INC, of Oakland, CA. in the San Francisco Bay area,
until such time that the current project is complete,
but that such consulting position shall be terminated on or before October l, 2004, unless

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mutually extended by the parties to this Agreement in writing. Until such time that such
consulting project is completed, Employee shall devote 4 (four) days per week on a Monday through
Thursday schedule. After such time, Employee shall devote full time (five days per week) to
fulfill the terms of this Agreement.

     4. Non-Competition. During the Employment Term and for three (3) months after
Employee’s employment terminates, if it is terminated pursuant to Section 13(b) or 13(c) of this
Agreement, Employee shall not, without the prior written permission of Employer, in the United
States, its territories and possessions or within an one hundred (100) mile radius of any
Competitive Business of Employer, its affiliates or subsidiaries located outside the United States,
directly or indirectly, (a) enter into the employ of or 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 or (e) solicit,
interfere with, or endeavor to entice away from Employer any of its customers or sources of supply.
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 involved at any time during the twelve month
period immediately prior to the termination of the Employee’s employment.

     5. Confidentiality. 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. In connection herewith, Employee shall execute a Confidentiality and Non-Disclosure
Agreement attached hereto as Exhibit B and incorporated herein by this reference.

     6. Limitations on Authority. Employee understands that he may not enter into any of
the following types of agreements that exceed Fifteen Thousand Dollars ($15,000.00) in amount,
without the express written approval of the Chief Executive Officer or his designee:

          a. Pledge the credit of Employer or any of its other employees;

          b. Bind the Employer under any contract, agreement, note, mortgage or otherwise;

          c. Release or discharge any debt due to Employer unless the Employer has received the full
amount thereof, and,

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          d. Sell, mortgage, transfer or otherwise dispose of any assets of the Employer.

     7. Personnel Policies and Procedures. The Employer shall have the authority to
establish from time to time personnel policies and procedures to be followed by its employees.
Employee agrees to comply with the policies and procedures of the Employer. To the extent any
provisions in Employer’s personnel policies and procedures differ with the terms of this Agreement,
the terms of this Agreement shall apply. Any employees subject to the direction and supervision of
Employee shall be hired or terminated only upon consultation with Employee.

     8. Compensation.

          a. Salary. Employee shall be paid an annual base salary, less income taxes and other
applicable withholdings, of One Hundred and Fifteen Thousand Dollars ($115,000.00).

          b. Stock Options. As consideration for services rendered and in lieu of additional
salary, Employee shall be granted options to purchase 100,000 shares of common stock on a vesting
schedule set forth in that certain Stock Option Agreement, in the form attached hereto as Exhibit C
and incorporated herein by this reference.

     9. Fringe Benefits. The benefits set forth in this Section 9 shall continue through
the term of the Agreement and any renewals thereof, subject to any modifications thereof which
shall be set forth in writing and signed by the parties; and such benefits shall continue upon
termination for other than good cause (as defined below) until (a) the last day of a three (3)
month period after the effective date of termination or (b) the date upon which Employee accepts
employment from a third party after the effective date of termination, which ever date first
occurs.

          a. Medical, Dental and Long-Term Disability. Employee shall receive medical
insurance, dental insurance and long-term disability benefits as currently provided to full-time
employees of Employer.

          b. Life Insurance. Employee shall receive whole life insurance in amounts currently
provided by Employer. Such life insurance shall stay in effect during Employee’s employment with
Employer. If Employee desires that the Employer increase the amount of life insurance currently
provided to Employee, Employee shall agree to pay the difference between the current premiums and
those required to be paid in order to increase the current coverage of said policy. Such amounts
shall be paid by Employee as a payroll deduction.

          c. Retirement Benefits. Employee shall receive retirement benefits (defined benefit
contribution (401 K) and pension plan) as currently available to full-time employees of Employer.

     10. Vacation and Leave. From and after such time that Employer shall receive notice
from the FDA that its product Artecoll/Artefill is approved for commercial sale and distribution,
Employee shall be entitled to three (3) weeks of paid vacation per year and personal leave
time (including sick days) which must be used during the year in which such time is accrued or such
time shall be forfeited. Notwithstanding the foregoing, Employee shall be permitted to take one

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full week of vacation (7 days) prior to Employer’s receipt of FDA approval, after forty-five (45)
days of continuous employment under this Agreement.

     11. Expenses. Employee shall be entitled one round-trip airfare to the San Francisco
area per week and such other living expenses related to Employee’s duties for Employer up
to $3000.00 per month until Employee has moved permanently to the San Diego area, subject to
presentation of receipts for all such expenses and approval of same in Employer’s discretion.
Employer shall not be obligated to approve such receipts unless approval for such expenses is
obtained in advance. Additionally, 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 the employment of Employee shall terminate prior
to its expiration date under the following conditions:

          a. The death of Employee;

          b. The permanent disability of Employee (permanent disability shall exist when Employee
suffers from a condition of mind or body that indefinitely prevents his from further performance of
the essential functions of his position with or without reasonable accommodation); or,

          c. Upon receipt by Employee of written notice from Employer that Employee’s employment is
being discharged for “good cause.” The Employer has “good cause” to discharge Employee, without
liability, for the reasons listed below:

               i. Employee fails or refuses to faithfully and diligently perform the usual and customary
duties of his employment which failure or refusal is not cured within thirty (30) days after
written notice thereof is given to Employee; or

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

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

               iv. It is determined that the 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 unlawful discriminatory or harassing conduct,
the filing of false expense or related reports, or being convicted of a felony; or

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

               vi. As a result of a slow-down in business, or similar circumstance, or upon a Change of
Control (defined below), it is determined that Employee’s services are no longer needed; or

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          d. Upon receipt by Employee of written notice from Employer that Employee’s employment is
being discharged for “other than good cause;” or

          e. Upon receipt by Employer of written notice from Employee that Employee is resigning, except
as set forth otherwise below. In such event, Employer’s obligations hereunder shall terminate
after paying Employee any compensation owed through the last day he works; or

          f. By the mutual consent of Employer and the Employee on such terms as they may agree.

     13. Compensation Upon Termination.

          a. Good Cause. In the event Employee is discharged for good cause, he shall receive
two (2) weeks’ notice that his employment is terminated and shall receive compensation at his then
wage level for those two weeks. Employee is entitled to no other severance compensation when he is
terminated for good cause as defined in Section 12(c) above.

          b. For Other Than Good Cause. In the event Employee’s employment is terminated for
other than good cause, he shall receive severance compensation of three (3) months’ salary at his
then-current wage level. Employee is entitled to no other severance compensation when termination
occurs under Section 12(d) above, except when such resignation occurs in connection with a Change
of Control as defined below.

          c. ChanGre of Control. “Change of Control” as used in this Agreement shall mean (a)
the acquisition of Employer by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger or consolidation, but
excluding any merger effected exclusively for the purpose of changing the domicile of Employer); or
(b) a sale or exchange of all or substantially all of the assets of the Employer; unless in the
case of transaction described in (a) or (b) above, 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. Employer
will use its best efforts to ensure that the acquiring or surviving company agrees to the same
employment terms as set forth herein. If the acquiring or surviving company does not agree to the
existing employment terms, and Employee resigns as a result of such Change of Control and the
failure of the acquiring company to agree to these employment terms and conditions, such
termination shall be deemed to be “for other than good cause,” notwithstanding Section 12(d) above,
and Employee shall receive the severance compensation set forth in Section 13(b) above. Payment of
any severance pay due hereunder shall be made immediately prior to the closing or consummation of
any transaction which constitutes a Change of Control. For purposes of this section, any
resignation of Employee in connection with the anticipated merger
of Employer and Artes Europe (a foreign entity) shall not result in the payment of severance
benefits and shall not constitute a termination for “other than good cause.”

     14. Arbitration/Sole Remedy for Breach of Agreement. In the event of any dispute
between Employer and Employee concerning any aspect of the employment relationship,

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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 all claims or controversies (“claims”) that Employer
may have against Employee or that Employee may have against Employer or against its officers,
directors, partners, employees, agents, pension or benefit plans, administrators, or fiduciaries,
franchisors, or any parent, subsidiary or affiliated company or corporation (collectively referred
to as “Employer”), relating to, resulting from, or in any way arising out of Employee’s employment
relationship with Employer and/or the termination of Employee’s employment relationship with
Employer, to the extent permitted by law. The claims covered by this Agreement include, but are
not limited to, claims for wages or other compensation due; claims for breach of any contract or
covenant (express or implied); tort claims; claims for discrimination and harassment (including,
but not limited to, race, sex, religion, national origin, age, marital status or medical condition,
disability, or sexual orientation); claims for benefits (except where an employee benefit or
pension plan specifies that its claims procedure shall culminate in an arbitration procedure
different from this one); and claims for violation of any public policy, federal, state or other
governmental law, statute, regulation or ordinance, except claims excluded in the following
section.

          b. Claims Not Covered by the Agreement. Claims Employee may have for workers’
compensation (excluding discrimination claims under workers’ compensation statutes) or unemployment
compensation benefits are not covered by this Agreement. Also not covered are claims by Employer
for injunctive and/or other equitable relief for unfair competition and/or the use and/or
unauthorized disclosure of trade secrets or confidential information, as to which Employee
understands and agrees that Employer may seek and obtain relief from a court of competent
jurisdiction.

          c. Required Notice of Claims and Statute of Limitations. Arbitration may be initiated
by Employee by serving or mailing a written notice to Dr. Stefan Lemperle of Employer.
Arbitration may be initiated by Employer by serving or mailing a written notice to Employee at
his/her 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.

          d. Arbitration Procedures.

               i. After demand for arbitration has been made by serving written notice under the terms of
Section 142(c) 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.

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               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. In the event the arbitrator determines a breach of contract occurred, the parties agree
that any award of contract damages shall not be greater than three (3) months’ wages at Employee’s
then-current rate of pay.

               iv. 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 plaintiff’s claims
through such a motion.

          e. 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.

          f. 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.

          g. Waiver of Jury Trial/Exclusive Remedy. Employee and Employer waive any
constitutional right to have any dispute between them covered by the terms of this Agreement
decided by a court of law and/or by a jury in a court proceeding and/or by any administrative
agency, other than those claims subject to Paragraph 14(b).

     15. Successors and Assigns. The rights and obligations of the 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 his rights or obligations under this
Agreement.

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

     17. 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.

     18. 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.

     19. 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.

     20. Notices. Any notice required or permitted to be given under this Agreement shall
be sufficient, if in writing, sent by mail to his residence in the case of Employee, or hand
delivered to the Employee, or to its principal office in the case of the Employer.

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

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

	 	 	 	 	 
	 	 	/s/ Lawrence Braga
	 	 	 
	 	 	Lawrence Braga
	 
	 	 	 	 
	 	 	Artes Medical USA, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ Stefan Lemperle
	 

	 	 	 	 
	 

	 	 	 	     Stefan Lemperle
	 

	 	 	 	     Chief Executive Officer

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Exhibit A

(Duties of Director of Manufacturing)

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

	 	 	Responsible for manufacturing operations, ensuring that product demands are met in a safe,
high-quality, c-GMP compliant, reliable and cost-effective manner
	 
	—	 	Develop and sustain robust scalable business processes and ensure
selection of quality personnel. Train, develop and retain and
excellent employee workforce.
	 
	—	 	Maintain manufacturing facilities in a safe, c-GMP compliant manner,
ensuring local, state and federal regulatory requirements are met
	 
	—	 	Maintain raw material and final product inventory to meet production
and sale demands. Provide cost effective solutions to the inventory
management systems.

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Exhibit B

(Confidentiality Agreement)

Intentionally omitted.

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Exhibit C

(Form of Stock Option Agreement)

Intentionally omitted.

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EXHIBIT 10.12

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into and becomes effective as of July l,
2004 (the “Effective Date”) by and between Artes Medical USA, Inc. (“Employer” or “Company”) and
William von Brendel (“Employee”).

RECITALS

     A. Employer is a Delaware corporation and is qualified to do business in the State of
California with its principal offices located at 4660 La Jolla Village Drive, Suite 825, San Diego,
California 92122..

     B. Both Employer and Employee desire that Employee serve Employer in the capacity of Vice
President, Worldwide Sales & Marketing and both parties desire to memorialize this relationship in
writing.

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

AGREEMENT

     1. Employment. Employer hereby engages Employee to serve as Vice President, Worldwide
Sales & Marketing and Employee hereby accepts such engagement upon the terms and conditions set
forth herein.

     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. If the
Agreement is not terminated pursuant to Section 12, the Agreement shall continue from year to year
after July 1, 2008, unless either party to the Agreement gives written notice to the other of a
desire to change, amend, modify or terminate the Agreement, at least sixty (60) days prior to the
expiration of the then-current term of the Agreement.

     3. Duties. Employee is employed to serve as Vice President, Worldwide Sales &
Marketing and shall perform such duties as are customarily performed by a Vice President, Worldwide
Sales & Marketing and such other duties as the Chief Executive Officer assigns from to time. Such
duties shall include those duties identified on Exhibit A, which is incorporated herein by this
reference. Employee acknowledges that he will report to the Chief Executive Officer who will be
Employee’s supervisor. As part of Employee’s duties, Employee acknowledges and understands that:
(a) Employee will devote his utmost knowledge and best skill to the performance of his duties; (b)
Except as set forth otherwise below, Employee will devote his full business time to the rendition
of such services, subject to absences for customary vacations and for temporary illness; and (c)
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, subject to Section 4 below.

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     4. Non-Competition. During the Employment Term and for three (3) months after
Employee’s employment terminates, if it is terminated pursuant to Section 13(b) or 13(c) of this
Agreement, Employee shall not, without the prior written permission of Employer, in the United
States, its territories and possessions or within an one hundred (100) mile radius of any
Competitive Business of Employer, its affiliates or subsidiaries located outside the United States,
directly or indirectly, (a) enter into the employ of or 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 or (e) solicit,
interfere with, or endeavor to entice away from Employer any of its customers or sources of supply.
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 involved at any time during the twelve month
period immediately prior to the termination of the Employee’s employment.

     5. Confidentiality. 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. In connection herewith, Employee shall execute a Confidentiality and Non-Disclosure
Agreement attached hereto as Exhibit B and incorporated herein by this reference.

     6. Limitations on Authority. Employee understands that he may not enter into any of
the following types of agreements that exceed Fifteen Thousand Dollars ($15,000.00) in amount,
without the express written approval of the Chief Executive Officer or his designee:

          a. Pledge the credit of Employer or any of its other employees;

          b. Bind the Employer under any contract, agreement, note, mortgage or otherwise;

          c. Release or discharge any debt due to Employer unless the Employer has received the full
amount thereof, and,

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          d. Sell, mortgage, transfer or otherwise dispose of any assets of the Employer.

     7. Personnel Policies and Procedures. The Employer shall have the authority to
establish from time to time personnel policies and procedures to be followed by its employees.
Employee agrees to comply with the policies and procedures of the Employer. To the extent any
provisions in Employer’s personnel policies and procedures differ with the terms of this Agreement,
the terms of this Agreement shall apply. Any employees subject to the direction and supervision of
Employee shall be hired or terminated only upon consultation with Employee.

     8. Compensation.

          a. Salary. Employee shall be paid an annual base salary, less income taxes and other
applicable withholdings, of One Hundred and Fifty Thousand Dollars ($150,000.00). Employee shall
be eligible for a performance bonus up to fifty percent (50%) of annual salary at the discretion of
Employer’s Board of Directors for meeting performance milestones prior to the marketing of
Employer’s product Artefill TM  which are set forth on Exhibit A, attached
hereto. From and after the launch of the marketing of Artefill TM  Employee
shall be eligible for sales commission payments in accordance with the policies and procedures of
Employer which shall be adopted by Employer’s Board of Directors and set forth in writing, and
thereafter made a part of this Agreement,

          b. Stock Options. As consideration for services rendered and in lieu of additional
salary, Employee shall be 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 C
and incorporated herein by this reference.

     9. Fringe Benefits. The benefits set forth in this Section 9 shall continue through
the term of the Agreement and any renewals thereof, subject to any modifications thereof which
shall be set forth in writing and signed by the parties; and such benefits shall continue upon
termination for other than good cause (as defined below) until (a) the last day of a three (3)
month period after the effective date of termination or (b) the date upon which Employee accepts
employment from a third party after the effective date of termination, which ever date first
occurs.

          a. Medical Dental and Long-Term Disability. Employee shall receive medical insurance,
dental insurance and long-term disability benefits as currently provided to full-time employees of
Employer.

          b. Life Insurance. Employee shall receive whole life insurance in amounts currently
provided by Employer. Such life insurance shall stay in effect during Employee’s employment with
Employer. If Employee desires that the Employer increase the amount of life insurance currently
provided to Employee, Employee shall agree to pay the difference between the current premiums and
those required to be paid in order to
increase the current coverage of said policy. Such amounts shall be paid by Employee as a
payroll deduction.

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          c.
Vehicle Allowance. Employee will be
provided ($0) as a car allowance
per month during his employment with Employer to cover costs of maintenance, gasoline, insurance
and other expenses related thereto. The parties acknowledge that Employee shall perform duties for
Employer out of his home office, until such time that an office becomes available in Employer’s
principal offices,

          d. Retirement Benefits. Employee shall receive retirement benefits (defined benefit
contribution (401 K) and pension plan) as currently available to full-time employees of Employer.

     10. Vacation and Leave. From and after such time that Employer shall receive notice
from the FDA that its product Artecoll/Artefill is approved for commercial sale and distribution,
Employee shall be entitled to three (3) weeks of paid vacation per year and personal leave time
(including sick days) which must be used during the year in which such time is accrued or such time
shall be forfeited. Notwithstanding the foregoing, Employee shall be permitted to take one full
week of vacation (7 days) prior to Employer’s receipt of FDA approval, after forty-five (45) days
of continuous employment under this Agreement.

     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 the employment of Employee shall terminate prior
to its expiration date under the following conditions:

          a. The death of Employee;

          b. The permanent disability of Employee (permanent disability shall exist when Employee
suffers from a condition of mind or body that indefinitely prevents his from further performance of
the essential functions of his position with or without reasonable accommodation); or,

          c. Upon receipt by Employee of written notice from Employer that Employee’s employment is
being discharged for “good cause.” The Employer has “good cause” to discharge Employee, without
liability, for the reasons listed below:

               i. Employee fails or refuses to faithfully and diligently perform the usual and customary
duties of his employment which failure or refusal is not cured within thirty (30) days after
written notice thereof is given to Employee; or

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

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

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               iv. It is determined that the 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 unlawful discriminatory or harassing conduct,
the filing of false expense or related reports, or being convicted of a felony; or

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

               vi. As a result of a slow-down in business, or similar circumstance, or upon a Change of
Control (defined below), it is determined that Employee’s services are no longer needed; or

          d. Upon receipt by Employee of written notice from Employer that Employee’s employment is
being discharged for “other than good cause;” or

          e. Upon receipt by Employer of written notice from Employee that Employee is resigning, except
as set forth otherwise below. In such event, Employer’s obligations hereunder shall terminate
after paying Employee any compensation owed through the last day he works; or

          f. By the mutual consent of Employer and the Employee on such terms as they may agree.

     13. Compensation Upon Termination.

          a. Good Cause. In the event Employee is discharged for good cause, he shall receive
two (2) weeks’ notice that his employment is terminated and shall receive compensation at his then
wage level for those two weeks. Employee is entitled to no other severance compensation when he is
terminated for good cause as defined in Section 12(c) above.

          b. For Other Than Good Cause. In the event Employee’s employment is terminated for
other than good cause, he shall receive severance compensation of three (3) months’ salary at his
then-current wage level. Employee is entitled to no other severance compensation when termination
occurs under Section 12(e) above, except when such resignation occurs in connection with a Change
of Control as defined below.

          c. Change of Control. “Change of Control” as used in this Agreement shall mean (a)
the acquisition of Employer by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger or consolidation, but
excluding any merger effected exclusively for the purpose of changing the domicile of Employer); or
(b) a sale or exchange of all or substantially all of the assets of the Employer; unless in the
case of transaction described
in (a) or (b) above, 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

5

 

percent
(50%) of the voting securities of the surviving or acquiring entity. Employer will use its best
efforts to ensure that the acquiring or surviving company agrees to the same employment terms as
set forth herein. If the acquiring or surviving company does not agree to the existing employment
terms, and Employee resigns as a result of such Change of Control and the failure of the acquiring
company to agree to these employment terms and conditions, such termination shall be deemed to be
“for other than good cause,” notwithstanding Section 12(d) above, and Employee shall receive the
severance compensation set forth in Section 13(b) above. Payment of any severance pay due
hereunder shall be made immediately prior to the closing or consummation of any transaction, which
constitutes a Change of Control. For purposes of this section, any resignation of Employee in
connection with the anticipated merger of Employer and Artes Europe (a foreign entity) shall not
result in the payment of severance benefits and shall not constitute a termination for “other than
good cause.”

     14. 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 all claims or controversies (“claims”) that Employer
may have against Employee or that Employee may have against Employer or against its officers,
directors, partners, employees, agents, pension or benefit plans, administrators, or fiduciaries,
franchisors, or any parent, subsidiary or affiliated company or corporation (collectively referred
to as “Employer”), relating to, resulting from, or in any way arising out of Employee’s employment
relationship with Employer and/or the termination of Employee’s employment relationship with
Employer, to the extent permitted by law. The claims covered by this Agreement include, but are
not limited to, claims for wages or other compensation due; claims for breach of any contract or
covenant (express or implied); tort claims; claims for discrimination and harassment (including,
but not limited to, race, sex, religion, national origin, age, marital status or medical condition,
disability, or sexual orientation); claims for benefits (except where an employee benefit or
pension plan specifies that its claims procedure shall culminate in an arbitration procedure
different from this one); and claims for violation of any public policy, federal, state or other
governmental law, statute, regulation or ordinance, except claims excluded in the following
section.

          b. Claims Not Covered by the Agreement. Claims Employee may have for workers’
compensation (excluding discrimination claims under workers’ compensation statutes) or unemployment
compensation benefits are not covered by this Agreement. Also not covered are claims by Employer
for injunctive and/or other
equitable relief for unfair competition and/or the use and/or unauthorized disclosure of trade
secrets or confidential information, as to which Employee understands and agrees that Employer may
seek and obtain relief from a court of competent jurisdiction.

6

 

          c. Required Notice of Claims and Statute of Limitations. Arbitration may be initiated
by Employee by serving or mailing a written notice to Dr. Stefan Lemperle of Employer. Arbitration
may be initiated by Employer by serving or mailing a written notice to Employee at his/her 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.

          d. Arbitration Procedures.

               i. After demand for arbitration has been made by serving written notice under the terms of
Section 14 (c) 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. In the event the arbitrator determines a breach of contract occurred, the parties agree
that any award of contract damages shall not be greater than three (3) months’ wages at Employee’s
then-current rate of pay.

               iv. 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 plaintiff’s claims
through such a motion.

          e. 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.

          f. 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.

          g. Waiver of Jury Trial/Exclusive Remedy. Employee and Employer waive any
constitutional right to have any dispute between them covered by the terms of this Agreement
decided by a court of law and/or by a jury in a court proceeding and/or by any administrative
agency, other than those claims subject to Paragraph 14(b).

     15. Successors and Assigns. The rights and obligations of the 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 his rights or
obligations under this Agreement.

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

7

 

     17. 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.

     18. 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.

     19. 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.

     20. Notices. Any notice required or permitted to be given under this Agreement shall
be sufficient, if in writing, sent by mail to his residence in the case of Employee, or hand
delivered to the Employee, or to its principal office in the case of the Employer.

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

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

	 	 	 	 	 
	 	 	/s/ William von Brendel
	 	 	 
	 	 	William von Brendel
	 
	 	 	 	 
	 	 	Artes Medical USA, Inc.
	 
	 	 	 	 
	 

	 	By
	 	/s/ Stefan Lemperle
	 

	 	 	 	 
	 

	 	 	 	Stefan Lemperle
	 

	 	 	 	Chief Executive Officer

8

 

Exhibit A

(Duties of Vice President, Worldwide Sales & Marketing)

DUTIES OF EMPLOYEE

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

	 	•	 	Achieve the company’s revenue and profitability objectives.
	 
	 	•	 	Global Sales, Sales Management and Distribution Strategy and Execution. Develop the
Strategic and Annual Sales Plan and Expense Budget. Monitor performance results and
inform the management team on progress.
	 
	 	•	 	Develop Sales Territories, Recruit/ Hire/ Train Sales Representatives and develop
incentive programs to reward performance and retain top performers.
	 
	 	•	 	Identify, Recruit, Appoint Distributors. Develop/ Monitor performance-based
distribution contracts.
	 
	 	•	 	Global Marketing, Product Branding, Corporate/Product PR and Promotional Strategy and
Execution. Develop the company’s Strategic and Annual Marketing Plan. Conduct Market and
Marketing Research and Market Intelligence. Interpret research results and incorporate
conclusions into Marketing Strategy.
	 
	 	•	 	Identify, Hire, Train and Mentor Marketing and Customer Service Staff.
	 
	 	•	 	Execute the ArtefillTM Product launch initiative. Develop of
Marketing Collaterals, Product Training Videos, Product Ads, Physician Practice
Development Materials/Modules, ArteFill Sales and Clinical Resource Binder, Congress
Exhibits and Exhibition Plans and Sales and Product Launch Meetings.
	 
	 	•	 	Cultivate direct relationships with key customers and opinion leaders in the target
audiences of Plastic Surgery, Cosmetic Surgery and Dermatology.
	 
	 	•	 	Participate in the development of company scientific symposiums and physician training
workshops. Assist in the company’s publishing of scientific results and patient outcomes
data.
	 
	 	•	 	Participate as an officer of the company and support other members of the management
team.

9

 

Artes Medical

Performance Bonus Objectives

	 	•	 	Function = VP, Worldwide Sales & Marketing
	 
	 	•	 	Period = July 1, 2004 to June 30, 2005

	 	 	 	 	 
	Incentive	 	 
	Payments	 	Timing / Objectives / Percent of Bonus Potential
	 
	 	 	 	 	 

	$	5,000	 	 	4Q/04 — Artefill Launch and Marketing Plan

	 	 	 	 	 

	$	10,000	 	 	4Q/04 — Artefill Launch Materials / Collaterals =
Note: Four Page Brochure, Product Training Video,
Exhibit, Clinical Resource Manual/Monograph, Journal
Advertisements

	 	 	 	 	 

	$	10,000	 	 	4Q/04 — Recruitment, Hire and Training of 4 — 5 U.S.
Regional Managers

	 	 	 	 	 

	$	5,000	 	 	4Q/04 — Recruitment, Hire and Training of 5 Key
International Distributors

	 	 	 	 	 

	$	5,000	 	 	1Q/05 — Recruitment, Hire and Training of Marketing
and Customer Service Staff

	 	 	 	 	 

	$	15,000	 	 	1Q/05 — Artefill pre-ASPS Congress Worldwide Launch
and Sales Meeting

	 	 	 	 	 

	 
	$	50,000	 	 	total

	 

10

 

Exhibit B

(Confidentiality Agreement)

Intentionally omitted.

11

 

Exhibit C

(Form of Stock Option Agreement)

Intentionally omitted.

12

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