Exhibit 10.4.1

CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(B)(4) AND 230.406.
THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND ARE MARKED
ACCORDINGLY. THE CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

AXOGEN

AMENDED AND RESTATED NERVE TISSUE PROCESSING AGREEMENT

 

“LIFENET HEALTH”   “AXOGEN” LifeNet Health   AXOGEN CORPORATION 1864 Concert
Drive   13859 Progress Blvd Virginia Beach, VA 23453   Suite 100   Alachua, FL
32615

This Amended and Restated AXOGEN Nerve Tissue Processing Agreement (“Agreement”)
consists of this signature page, the attached Terms and Conditions, and the
Exhibits marked below. This Agreement authorizes LIFENET HEALTH to process human
cadaveric tissue for AXOGEN. The term of this Agreement shall commence on the
Effective Date and shall end as provided in the Terms and Conditions. For
purposes of this Agreement, the “Effective Date” shall be the last date executed
below. This Agreement becomes legally binding upon signature below by authorized
representatives of the parties, and supersedes the AXOGEN Nerve Tissue
Processing Agreement by and between the parties, dated November 16, 2007 (the
“Original Agreement”).

Exhibits

                A — BATCH SCHEDULE

                B — FEE SCHEDULE

 

LIFENET HEALTH       AXOGEN By:   

/s/ Gordon Berkstresser

        By:   

/s/ Jamie M. Grooms

Title:   

CFO

        Title:   

CEO

Date:   

2-26-08

        Date:   

2/27/08

--------------------------------------------------------------------------------

TERMS AND CONDITIONS

 

1. PROCUREMENT

AXOGEN shall provide LIFENET HEALTH with aseptically procured human allograft
nerve tissue from its donor sources, suitable for Processing (as defined below)
by LIFENET HEALTH into Product, and distribution by AXOGEN for clinical
implantation. The term “Product” means human nerve allografts based on AxoGen’s
proprietary technology that meet Product Specifications (as defined below) and
meet applicable federal, state and local regulations and in accordance with the
Standards for Tissue Banking of the AATB. The term “aseptic procurement” means
the procurement of nerve tissues under aseptic conditions using aseptic
techniques.

 

2. SERVICES

LIFENET HEALTH shall receive aseptically procured nerve tissues for processing
in accordance with all applicable federal, state and local regulations and in
accordance with the Standards for Tissue Banking of the AATB and, on a schedule
agreed to in writing by the parties, manage, perform and document aseptic
debriding, processing and packaging of aseptically procured nerve tissues in
accordance with AXOGEN’s proprietary process (“Process” or the act of
“Processing”). LifeNet Health will follow instructions and meet quality
standards defined in AXOGEN created SOPs governing Processing and revised from
time to time by AXOGEN and approved by LIFENET HEALTH on an ongoing basis and
incorporated herein and in accordance with all applicable federal, state and
local regulations and in accordance with the Standards for Tissue Banking of the
AATB (the “Product Specifications”). LIFENET HEALTH shall not make any changes
to the Process or Product Specifications without the prior written consent of
AXOGEN. LIFENET HEALTH shall provide routine sterilization of daily supplies.
LIFENET HEALTH reserves the right to refuse to Process any donor or donor
material that it, in its reasonable discretion, finds unacceptable.

 

3. EQUIPMENT

AXOGEN shall supply LIFENET HEALTH with all processing reagents and equipment
(“Equipment”) necessary to Process each nerve tissue, excluding freezers,
refrigerators, sealers (to be maintained by LIFENET HEALTH) and various
disposable supplies such as sterile gowns, sleeves, gloves, table covers, and
various cleaning supplies, which shall be supplied by LIFENET HEALTH. AXOGEN
shall own all the Equipment. LIFENET HEALTH shall assist AXOGEN in making any
UCC or other filings necessary to secure and evidence AXOGEN’s ownership of such
Equipment as and when requested by AXOGEN. AXOGEN shall also supply the
necessary calibration and preventative maintenance documents required for all
Equipment purchased for LIFENET HEALTH. LIFENET HEALTH will work with AXOGEN to
perform the necessary Equipment calibrations and preventative maintenance.
LIFENET HEALTH shall (i) use the Equipment only for the purposes authorized by
AXOGEN, (ii) restrict access to and use of the Equipment to those individuals
for whom such access and use is required to conduct activities on behalf of
AXOGEN and (iii) deliver the Equipment to AXOGEN or its designee on the earlier
of the termination or expiration of this Agreement, or as otherwise requested by
AXOGEN. In the event that any item of Equipment under LIFENET HEALTH’s control
becomes damaged or rendered unusable due to negligence, LIFENET HEALTH shall
replace or repair such Equipment at its own expense, with AXOGEN’S prior written
approval.

4. DOCUMENTATION AND RECORD MAINTENANCE

AXOGEN shall provide LIFENET HEALTH with documentation of the suitability of the
nerve tissue donors. This documentation shall include a copy of AXOGEN’S Medical
Director release of donor nerve tissue, which shall include AXOGEN’S Medical
Director confirmation of negative/nonreactive results of all required
serologicals testing, acceptable pre-Processing bacteriologic culture results of
donor nerve tissue, acceptable results of any or all laboratory analyses and
medical information, and acceptable review of donor consent form in accordance
with local regulations. AXOGEN expressly warrants to its knowledge the validity,
accuracy and completeness of the information included in the documentation
provided to LIFENET HEALTH.

LIFENET HEALTH shall maintain appropriate records to document all aspects of
Processing and training of LIFENET HEALTH employees, and provide copies of such
Processing records to AXOGEN.

LIFENET HEALTH shall also maintain adequate records to document disposition of
all materials received from AXOGEN, whether returned to AXOGEN or discarded.

AXOGEN is responsible for the review of all documentation and the final release
of nerve tissue grafts Processed for AXOGEN by LIFENET HEALTH.

 

5. NOTICE OF UNSUITABILITY OR COMPLAINTS

LIFENET HEALTH shall notify AXOGEN of problems with any nerve tissue provided
for Processing, and consult with and follow instructions from AXOGEN as to the
disposition of such nerve tissue. AXOGEN and LIFENET HEALTH will immediately
notify the other regarding any adverse events or complaints regarding Product.

AXOGEN shall have the right to reject any Product supplied that does not meet
the Product Specifications (“Nonconforming Product”) by delivering written
notice of such Nonconforming Product within a reasonable time frame agreed by
the parties. If such Nonconforming Product is (a) caused by the negligence or
misconduct of LIFENET HEALTH or (b) failure of LIFENET HEALTH to follow AXOGEN’s
Processing standards or applicable laws, LIFENET HEALTH shall reduce
proportionally the fee per batch; for example, if ten percent (10%) of the batch
was determined to be Nonconforming Product, if as a result of either 5(a) or
5(b), the fee per batch would be reduced by ten percent (10%). A batch is equal
to one donor.

 

6. MINIMUMS

AXOGEN shall provide a minimum number of donors for Processing, and LIFENET
HEALTH shall Process such minimum number of donors in each 12-month period
beginning upon the effective date of the debridement processing arrangement
between AXOGEN and LIFENET HEALTH, in accordance with the batch schedule
provided in Appendix A and as the same may be amended by the parties in writing
from time to time. In the event LIFENET HEALTH receives less than the number of
donors provided for in a given period as contained in Appendix A, a minimum
charge equal to the amount determined by subtracting the amount of donors
provided from such minimum number of donors, multiplied by the fee in Appendix
B, shall constitute the minimum fee due to LIFENET HEALTH for such

 

 

LIFENET HEALTH Initials and Date:      GB 2/26/08                

   AXOGEN Initials and Date:      JMG 2/27/08                

--------------------------------------------------------------------------------

period. LIFENET HEALTH shall notify AXOGEN in writing 180 days in advance if it
will not be able to

Process on the schedule agreed by the parties. In such case, the minimums for
that 12-month period will not apply.

 

7. SHIPPING

AXOGEN shall ship nerve tissue to LIFENET HEALTH for Processing in the manner
agreed to by the parties and in accordance with all applicable state, federal,
local or transportation carrier rules and regulations.

LIFENET HEALTH shall package all Product in a manner specified by AXOGEN in
AXOGEN created SOPs governing packaging and revised from time to time by AXOGEN
and LIFENET HEALTH on an ongoing basis and incorporated herein and in accordance
with all applicable federal, state and local regulations and in accordance with
the Standards for Tissue Banking of the AATB. LIFENET HEALTH shall return all
Product to AXOGEN in a manner that complies with all transportation carrier,
federal, state, and local regulations, and in a manner specified by AXOGEN in
AXOGEN created SOPs governing shipping and revised from time to time by AXOGEN
and LIFENET HEALTH.

LIFENET HEALTH shall not be responsible for any financial losses of AXOGEN for
nerve tissue or Product that is lost, damaged or otherwise rendered useless in
transit (to LIFENET HEALTH or from LIFENET HEALTH) except where such loss is due
to the negligence or willful misconduct of LIFENET HEALTH.

 

8. BILLING

AXOGEN shall pay all invoices for services rendered by LIFENET HEALTH within 30
days of the date on each invoice. LIFENET HEALTH shall have the right to impose
a charge of 1 1/2% per month on the undisputed unpaid balance of any past due
amount owed by AXOGEN and the right to refuse to respond to future requests
issued by AXOGEN until all such undisputed past due amounts have been paid in
full.

 

9. FEES

AXOGEN shall pay for Processing services in accordance with the fee schedule
provided in Appendix B.

AXOGEN is responsible for all shipping fees to and from LIFENET HEALTH and
accordingly, shall provide LIFENET HEALTH with its transportation carrier
account number. LIFENET HEALTH will direct transportation carrier to insure
shipments of Product as specified by AXOGEN.

 

10. LIMITATIONS

LIFENET HEALTH does not guarantee or warrant the performance of services under
this Agreement except as provided in this Section 10 and Section 11. LIFENET
HEALTH shall not be responsible for any loss or damage arising out of defective
performance of services unless attributable to LIFENET HEALTH’S negligence or
willful misconduct. LIFENET HEALTH shall not be liable for any indirect,
incidental, consequential or special damages resulting to AXOGEN from the
operation of this Agreement except in respect of a breach of Section 12 herein.

LIFENET HEALTH shall make its best efforts to maximize the amount and/or type of
nerve tissue grafts that can or will be used for Processing from a single nerve
tissue donor based on AXOGEN Specifications. Except as defined in this Agreement
in regards to the stipulations of Nonconforming Product in Section 5, LIFENET
HEALTH shall not be liable or responsible to AXOGEN, its customers, or patients
for being unable to perform any services in the

manner requested or at the time specified, but shall use its best efforts to
achieve complete services in the time requested by AXOGEN.

 

11. STANDARDS

LIFENET HEALTH and AXOGEN will comply with all applicable standards of procedure
and operation required by the AATB and all applicable federal and state
regulatory requirements throughout the term of this Agreement. LIFENET HEALTH
will update its federal and state registrations/licenses to include the
processing of nerve tissue. The warranties in Section 10 and Section 11 are
LIFENET HEALTH’S only warranties with respect to the provision of Processing
services and Product, and they are exclusive and in lieu of all other warranties
whether oral or written.

 

12. CONFIDENTIAL INFORMATION

Neither party (“Receiving Party”) shall use in any way other than as required
for the proper performance of its obligations under this Agreement and shall not
disclose to any third party any information given to it by the other party
(“Disclosing Party”) or otherwise acquired by a Receiving Party relating to the
Disclosing Party’s nerve tissue grafts, processes (and in the case of AXOGEN as
the Disclosing Party, including but not limited to the Process), plans, records,
techniques, procedures, customers, trade secrets or general business operations.
Any information that a Receiving Party legally possessed prior to disclosure to
it by the Disclosing Party’s representative, which is lawfully published or
which otherwise lawfully becomes a part of general knowledge from sources other
than Receiving Party shall not be subject to the restrictions of this
Section 12. The obligations under this Section 12 shall survive any expiration
or termination of this Agreement. In addition to the forgoing terms of this
Section 12, all information disclosed by the Disclosing Party to the Receiving
Party in advance of the Effective Date pursuant to the Confidentiality Agreement
(the “CDA”) by and between AXOGEN and LIFENET HEALTH, dated September 20, 2007,
or the Original Agreement is hereby subject to this Agreement, including,
without limitation, this Section 12. All information generated by LIFENET HEALTH
in performing the services hereunder or related to the Process shall be the
information of AXOGEN subject to the confidentiality and nonuse obligations
herein.

 

13. INTELLECTUAL PROPERTY

LIFENET HEALTH acknowledges and agrees that AXOGEN’S Process and all methods,
practices and works related thereto, whether or not patentable, and any
applicable patents relating thereto or arising therefrom, are intellectual
property owned solely by AXOGEN (“AXOGEN Intellectual Property”). In the event
that during the term of this AGREEMENT, an employee(s), or contract worker(s) of
LIFENET HEALTH alone conceives of an improvement, invention or discovery solely
relating to LIFENET HEALTH proprietary technology, such improvement, invention,
or discovery, and any corresponding proprietary rights throughout the world
(“LIFENET Technology”), shall be the property of LIFENET HEALTH. AXOGEN shall
have a royalty free, non-exclusive right to practice and use any such LIFENET
HEALTH Technology as it pertains to Processing whether or not covered by any
claim of any patent that may issue under the terms of this Article VII. In the
event that during the term of this AGREEMENT, an employee(s), and/or contract
worker(s) of LIFENET HEALTH or AXOGEN or both jointly conceive of an
improvement, invention or discovery, and any corresponding proprietary rights
throughout the world, other than LIFENET HEALTH Technology (a) relating to
AXOGEN Intellectual Property or (b) during the performance of the services
hereunder (“AXOGEN Technology”), such AXOGEN Technology shall be the property of
AXOGEN. LIFENET HEALTH shall have no right to use the AXOGEN Intellectual
Property and AXOGEN Technology except in its performance of this Agreement.
LIFENET HEALTH shall, and shall cause LIFENET HEALTH personnel to, keep
appropriate records of the work done pursuant to this Agreement, including

 

 

LIFENET HEALTH Initials and Date:      GB 2/26/08                

   AXOGEN Initials and Date:      JMG 2/27/08                

--------------------------------------------------------------------------------

laboratory notebooks or batch records, sufficient to properly document the
results of such work and otherwise sufficient to determine identity and dates of
inventorship of any new AXOGEN Intellectual Property or AXOGEN Technology; and
shall make such records available to AXOGEN upon reasonable notice during
LIFENET HEALTH normal business hours.

 

14. PUBLICATION

No announcement, news release, public statement, publication, or presentation
relating to the existence of this Agreement, the subject matter herein, or
either party’s performance hereunder (collectively, a “Publication”) will be
made by a party without the other party’s prior written approval whether during
or after the termination of this Agreement, except as required by law. Each
party agrees to submit each Publication it proposes to make to the other party
for purposes of such other party’s review, comment and approval. Each party
further agrees to respond as promptly as reasonably practicable and likewise
agrees that it will not unreasonably withhold approval of such Publication. The
parties agree that they will use reasonable efforts to coordinate the initial
announcement or press release relating to the existence of this Agreement so
that such initial announcement or press release by each is made
contemporaneously.

 

15. INDEMNIFICATION

AXOGEN shall indemnify and hold harmless LIFENET HEALTH, its agents, its
officers, trustees and employees from and against all third party claims,
damages, suits, liabilities, costs, charges, demands, losses and other expenses
(including, but not limited to, attorneys’ fees) attributable to bodily injury,
sickness, disease or death or to injury or destruction of tangible property
(“Losses”) arising out of or resulting in whole or in part from any act or
omission of AXOGEN, its employees or any other party acting under AXOGEN’S
supervision or control, provided, however, that the foregoing indemnification
obligations shall not apply to the extent that such Losses are caused by action
or omission to act of LIFENET HEALTH for which LIFENET HEALTH is required to
indemnify AXOGEN under the paragraph below.

LIFENET HEALTH shall indemnify and hold harmless AXOGEN, its agents, its
officers, trustees and employees from and against all Losses arising out of
LIFENET HEALTH’S failure to perform in accordance with its obligations under the
terms of this Agreement or the negligence or willful misconduct of LIFENET
HEALTH.

 

16. LIABILITY INSURANCE

Each party shall each maintain in force during the term of this Agreement
professional liability insurance coverage under a policy or policies issued by a
carrier satisfactory to the other party with minimum limits of five million
United States dollars ($5,000,000 U.S.), and no more than a fifty thousand
United State dollars ($50,000 U.S.) deductible. Each party shall provide the
other with a certificate(s) of insurance suitable to the other party which state
that the above required coverage is in full force and effect and will remain in
effect throughout the term of this Agreement unless the carrier provides not
less than sixty (60) days prior written notice of expiration or cancellation to
both the insured party and the party to whom such certificate is issued.

 

17. FORCE MAJEURE

Performance under this Agreement may be delayed by a party, and the other party
shall not be held in breach of any of its obligations under this Agreement or be
liable for damages resulting from such delay if such delay is due to acts of
God, acts of civil or military authority, fires, floods, labor troubles,
unavailability of transportation, epidemics, war or riot.

18. TERM AND TERMINATION

This Agreement shall be effective as of the Effective Date and shall remain in
effect for twenty-four (24) months. Following the initial term of twenty-four
(24) months, this Agreement shall automatically renew for additional terms of
one (1) year unless written notice of termination is received by one party from
the other party at least one hundred eighty (180) days prior to any such
automatic renewal.

Either party may terminate this Agreement, in the event the other party has
committed a material breach by giving the alleged breaching party 60 days to
cure the breach. This Agreement is subject to immediate termination for failure
to maintain the required insurance coverage under Section 15 or for becoming
insolvent or filing bankruptcy.

Termination shall not release or affect, and this Agreement shall remain fully
operative as to, any obligations or liabilities incurred by AXOGEN prior to the
effective date of such termination; provided that all indebtedness of AXOGEN to
LIFENET HEALTH of any kind shall become immediately due and payable on the
effective date of termination, and LIFENET HEALTH may deduct from any sums its
owes to AXOGEN any sums owed by AXOGEN to LIFENET HEALTH.

Termination of this Agreement shall not terminate any provision of this
Agreement intended to survive termination, including but not limited to Sections
10 and 12.

 

19. MISCELLANEOUS

 

A. This Agreement and the Appendices attached hereto constitute the entire
agreement between the parties and supersedes any and all other oral or written
agreements or understandings regarding this arrangement, including, without
limitation, the Original Agreement. This Agreement may not be amended except by
a written document signed by both parties.

 

B. All notices required or desired to be given under this Agreement shall be
deemed delivered when deposited in U.S. Certified Mail, return receipt
requested, postage prepaid, addressed to the recipient at the address indicated
in the signature page of this Agreement or at such other address as the
recipient may hereafter provide to the other party hereto. Any such notice shall
be deemed to be delivered two (2) days after such notification is deposited in
the U.S. Mail, certified, postage prepaid, or upon the hand delivery of such
notice, as the case may be.

 

C. Each party shall, as and when required by the other party, do all acts and
execute all documents as may be reasonably necessary to give effect to the
provisions of this Agreement.

 

D. This Agreement and the performance of any services hereunder shall be
governed by and construed in accordance with the laws of the State of Delaware
excluding its conflict of laws provisions.

 

E. Neither Party shall assign nor transfer this Agreement or any interest, right
or obligation hereunder without the prior written consent of the other party,
which consent shall not be unreasonably withheld.

 

F. All agreements and covenants of this Agreement are severable, and if any are
declared invalid by a competent court, this Agreement shall be interpreted as if
the invalid agreement or covenant were not contained in this Agreement, and all
remaining covenants and provisions of this Agreement shall remain in full force
and effect.

 

G. Neither party shall be deemed the drafter of this Agreement and the
interpretation of any ambiguity construed in this Agreement will not be affected
by claims that a particular party drafted any portion hereof.

 

H. The waiver of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach by any party.

END OF TERMS AND CONDITIONS

 

 

LIFENET HEALTH Initials and Date:      GB 2/26/08                

   AXOGEN Initials and Date:      JMG 2/27/08                

--------------------------------------------------------------------------------

APPENDIX A

BATCH SCHEDULE

[**]

 

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
Confidential Treatment Request.

 

LIFENET HEALTH Initials and Date:      GB 2/26/08                

   AXOGEN Initials and Date:      JMG 2/27/08                

--------------------------------------------------------------------------------

APPENDIX B

FEE SCHEDULE

 

1) The fee for providing services to Process nerve tissue into Product according
to AXOGEN Specifications, but not including [**], will be determined on [**].

 

  Upon successful implementation of a revised AXOGEN SOP for a process
improvement that materially reduces [**], the base fee will be reduced [**].

 

  Any process changes involving material changes in technical methods, supplies,
equipment or product quality requirements will be subject to mutually agreed
upon incremental adjustments.

 

2) [**].

 

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
Confidential Treatment Request.

 

LIFENET HEALTH Initials and Date:      GB 2/26/08                

   AXOGEN Initials and Date:      JMG 2/27/08                

--------------------------------------------------------------------------------

APPENDIX C

CONFIDENTIALITY AGREEMENT

[See Attached]

 

LIFENET HEALTH Initials and Date:      GB 2/26/08                

   AXOGEN Initials and Date:      JMG 2/27/08