Document:

[CONFIDENTIAL
      PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
      COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THESE PORTIONS
      HAVE
      BEEN REPLACED THROUGHOUT THIS AGREEMENT AND SCHEDULES BY THE FOLLOWING SYMBOL:
      ***]

     

    

    SUPPLY
      AGREEMENT

    

    This
      AGREEMENT (the "Agreement") dated as of March 29, 2007 (the "Effective Date")
      between Chem Development Inc, a Ohio corporation, having its principal place
      of
      business at 9079 Tyler Boulevard, Mentor, OH 44060 (hereinafter referred to
      as
      "CDI") and SyntheMed, Inc., a Delaware corporation, with an address at 200
      Middlesex Essex Turnpike, Iselin NJ 08830 (hereinafter referred to as
      "SyntheMed").

    

    WHEREAS,
      CDI is a company engaged in, among other things, manufacturing of products
      for
      use in a wide variety of applications including medical
      applications;

    

    WHEREAS,
      SyntheMed is engaged in the development and commercialization of products
      designed to prevent or reduce the formation of adhesions following a broad
      range
      of surgical procedures, all of which are based on SyntheMed’s proprietary,
      bioresorbable polymer technology.

    

    WHEREAS,
      SyntheMed’s lead product, REPEL-CV, is classified as a medical device by the US
      Food and Drug Administration and is currently under review by the
      FDA.

    

    WHEREAS,
      CDI has demonstrated its ability and capacity to produce material in accordance
      with SyntheMed’s specifications; 

    

    WHEREAS,
      SyntheMed desires CDI to provide services to produce the large dry component
      film roll and CDI desires to provide services to produce this material on the
      terms and conditions set forth herein. 

    

    NOW,
      THEREFORE, in consideration of the foregoing premises and the mutual covenants
      and agreements provided herein, the parties hereto, intending to be legally
      bound hereby, agree as follows:

    

    1.
      DEFINITIONS

    

    1.1.
      "Act" shall mean the Federal Food, Drug and Cosmetic Act.

    

    1.2.
      "Approval(s)" shall mean receipt from the FDA or other applicable Regulatory
      Authority of final approval, including any applicable pricing, final labeling
      or
      reimbursement approvals, necessary to manufacture, market and sell a Product
      in
      a country of the Territory.

    

    1.3.
      "SyntheMed Indemnified Party" shall have the meaning set forth in Section
      14.1.

    

    1.4.
      "Claim(s)" shall mean all charges, complaints, actions, suits, proceedings,
      hearings, investigations, claims and demands.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.5.
      "
      Product" shall mean SyntheMed’s large dry component film roll used in REPEL-CV
      that meets the Product Specification. 

    

    1.6.
      "Confidential Information" shall mean all oral or written information that
      is
      disclosed by either party (the "Disclosing Party") to the other party (the
      "Receiving Party"), or that the Receiving Party becomes aware of as a result
      of
      its discussions and work with the Disclosing Party, and that is not generally
      known to the public, including but not limited to, information of a technical
      nature such as trade secrets; manufacturing processes or devices or know-how;
      techniques, data, formulas, inventions, discoveries or innovations (whether
      or
      not patentable), specifications and characteristics of current products or
      products under development; research projects, methods and results; matters
      of a
      business nature such as information about costs, margins, pricing policies,
      markets, sales, suppliers and customers; product, marketing or strategic plans;
      financial information; personnel records and other information of a similar
      nature, provided, however, that Confidential Information shall not include
      any
      information that (i) is or becomes public knowledge without breach of the
      Receiving Party's obligations hereunder; (ii) is rightfully acquired by the
      Receiving Party from a third party that legally acquired the information and
      is
      not under a confidentiality restriction on disclosure or use; (iii) was already
      known to the Receiving Party prior to receipt from the Disclosing Party as
      evidenced by written and dated records; (iv) is independently developed by
      the
      Receiving Party;(v) is required to be disclosed by law or court order, provided
      that notice of the requirement is promptly delivered to the Disclosing Party
      in
      order to provide the Disclosing Party with an opportunity to challenge or limit
      the disclosure obligations; or (vi) is disclosed or used following the Receiving
      Party's receipt of express written consent from an authorized representative
      of
      the Disclosing Party. The Receiving Party shall have the burden of proof
      respecting any of the aforementioned events on which the Receiving Party relies
      as relieving it of any confidentiality restrictions hereunder. Written
      disclosures for which protection is sought must be obviously marked as
      "Confidential" or "Proprietary" and oral disclosures for which protection is
      sought must at the outset be clearly identified by the Disclosing Party as
      Confidential Information and submitted by the Disclosing Party in summary form
      to the Receiving Party, marked as above within thirty (30) days after
      disclosure; provided, however, that protection under Article 9 shall also be
      given to information that is not so marked if a reasonable person trained in
      research, development, manufacturing and marketing within the Field would assume
      that it is Confidential Information. For written information that would not
      normally appear to constitute confidential information, for the restrictions
      on
      Confidential Information to apply, a party must mark such information
      "CONFIDENTIAL."

    

    1.7.
      "Design History File" shall have the meaning set forth in Title 21 of the US
      Code of Federal Regulations, Part 820.

    

    1.8
      “Designated Facility” means the final manufacturer designated by SyntheMed

    

    1.9.
      "Disclosing Party" shall have the meaning set forth in Section 1.6.

    

    1.10.
      "FDA" shall have the meaning set forth in Section 3.1.

    

    1.11.
      "Governmental Authority" shall mean any court, tribunal, arbitrator, agency,
      department, legislative body, commission or other instrumentality of (a) any
      government of any country, (b) any foreign, federal, state, county, city or
      other political subdivision thereof or (c) any supranational body.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.12.
      "Initial Term" shall have the meaning set forth in Section 2.1.

    

    1.13.
      "Intellectual Property" shall mean all inventions, discoveries and innovations
      (whether patentable or unpatentable and whether or not reduced to practice),
      all
      improvements thereto, and all patents, patent rights, patent applications and
      invention disclosures, together with all reissues, continuations,
      continuations-in-part, revisions, extensions, and reexaminations thereof, all
      registered or unregistered trademarks, trade names and service marks, including
      all goodwill associated therewith, and copyrights, and all applications and
      registrations for any of the foregoing owned or controlled by or issued to
      SyntheMed or CDI, and any trade secrets and know-how, in each case relating
      to
      the Products in the Field in the Territory.

    

    1.14.
      "CDI Indemnified Party" shall have the meaning set forth in Section
      14.2.

    

    1.15.
      "Losses" shall mean any and all damages, awards, deficiencies, settlement
      amounts, defaults, assessments, fines, dues, penalties, costs, fees,
      liabilities, obligations, taxes, liens, losses, and expenses (including without
      limitation court costs, interest and reasonable fees of attorneys, accountants
      and other experts) incurred by or awarded to third parties and required to
      be
      paid to third parties with respect to a Claim by reason of any judgment, order,
      decree, stipulation or injunction, or any settlement subject to the
      indemnification provisions of this Agreement, together with all documented
      out-of-pocket costs and expenses incurred in complying with any judgments,
      orders, decrees, stipulations and injunctions that arise from or relate to
      a
      Claim of a third party.

    

    1.16.
      "MDR" shall have the meaning set forth in Section 4.2(c).

    

    1.17.
      “Raw Polymer Material ” means *** provided to CDI by or on behalf of SyntheMed
      that meets specifications as described in Schedule 1. 

    

    1.18.
      "Post Term Supply" shall have the meaning set forth in Section 2.1.

    

    1.19.
      "Product Specifications" shall mean the specifications detailing the Product,
      as
      shown in Schedule 2.

    

    1.20.
      "Product Warranties" shall have the meaning set forth in Section
      10.1.

    

    1.21.
      "Purchase Orders" shall have the meaning set forth in Section 5.3.

    

    1.22.
      "Purchase Commitment" shall have the meaning set forth in Section
      4.2(b).

    

    1.23.
      "QSR" shall mean the Quality System Regulation promulgated by the FDA under
      the
      Act or other applicable regulatory agencies of countries in which the Product
      will be sold as of the time of manufacture of the applicable Products; including
      ISO 13485, the European Union Council Medical Device Directives (the "EU Medical
      Device Directives"), and the Quality System Regulations as described in 21
      CFR
      Part 820.

    

    1.24.
      "Receiving Party" shall have the meaning set forth in Section 1.6.

    

    1.25.
      "Regulatory Authority" shall mean an authority or authorities designated or
      otherwise recognized by a government for regulatory purposes in connection
      with
      protection and safety of the public health (e.g., FDA, Notified Bodies, Health
      Canada, EMEA) in any country where Product is to be sold.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.26.
      "Renewal Term" shall have the meaning set forth in Section 2.1.

    

    1.27.
      "Rolling Forecast" shall have the meaning set forth in Section
      4.2(b).

    

    1.28.
      "Term" shall have the meaning set forth in Section 2.1.

    

    1.29.
      "Transfer Price" shall mean the price paid by SyntheMed to CDI for the Product,
      as set forth in Section 5.1 hereof.

    

    1.30.
      "USPTO" shall mean the United States Patent and Trademark Office.

    

    2.
      TERM

    

    2.1
      This
      Agreement shall commence on the Effective Date and, unless earlier terminated
      as
      provided herein, continue for five (5) years thereafter (the "Initial Term").
      The Initial Term shall be automatically extended for successive two (2) year
      terms (the "Renewal Terms"), unless written notice of any party's intention
      not
      to extend is provided by either party at least six (6) months prior to the
      expiration of the Initial Term or a Renewal Term (the Initial Term and the
      Renewal Terms are collectively referred to as the "Term"); however, should
      any
      such notice of non-renewal be given by CDI, CDI shall, if so requested by
      SyntheMed, supply Product(s) for up to an additional sixteen (16) months
      following the expiration of the then
      current
      Term (the "Post Term Supply") with price and delivery terms to be negotiated
      in
      good faith by both parties.

     

    3.
      REGULATORY APPROVAL OF THE PRODUCTS 

    

    3.1
      SyntheMed shall have responsibility for obtaining all necessary U.S. and foreign
      Approvals for the Products for use. CDI will cooperate with SyntheMed to the
      extent CDI's participation is reasonably necessary or appropriate in order
      for
      SyntheMed to procure such Approval. Without limiting the generality of the
      foregoing, CDI will make available to SyntheMed, without charge, information
      in
      CDI's possession and control that is required to prepare submissions for
      Approval, as SyntheMed may reasonably request, and as is reasonably necessary
      to
      obtain Approvals. All information provided by CDI hereunder shall be presented
      in a form which satisfies the requirements of applicable United States Food
      and
      Drug Administration (“FDA”) and other Regulatory Authority guidelines and/or
      regulations for such types of submissions seeking Approval. CDI shall consult
      with SyntheMed prior to engaging in any communication with the FDA or other
      Regulatory Authority in connection with manufacture of Product or other
      activities covered under this Agreement and shall provide SyntheMed a reasonable
      opportunity to review and comment upon any such proposed communication, whether
      written or oral. CDI shall provide to SyntheMed copies of any and all
      correspondence or other communications, whether written, oral or otherwise,
      between it and the FDA or such other Regulatory Authorities relating to the
      Product or production of any part thereof. In the event FDA or other Regulatory
      Authority requests additional information from CDI, CDI shall fully and promptly
      cooperate and advise SyntheMed of the estimated date by which it will respond
      to
      such request,. 

     

    4.
      COMMERCIALIZATION AND SUPPLY

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.1
      CDI
      agrees to:

     

    a.
      manufacture, package, label, store and deliver the Product in accordance with
      the applicable sections of the QSR.

    

    b.
      supply
      SyntheMed with all of SyntheMed’s requirements of Product(Schedule 2) consistent
      with the projected Rolling Forecasts (Schedule 5)(pursuant to Subsection
      4.2(b));

    

    c.
      deliver Product hereunder to the Designated Facility or as otherwise directed
      by
      SyntheMed on the scheduled delivery dates as set forth in the relevant Purchase
      Orders described in Section 5.3;

     

    d.
      permit
      SyntheMed or its third party designee full opportunity to test the Product
      to
      ensure compliance with Product Specifications prior to delivery by CDI, as
      provided in Section 6.1; 

    

    e.
      obtain
      written approval from SyntheMed prior to implementing any changes to the Product
      manufacturing process, raw materials, testing, systems, equipment, procedures,
      software, or facilities if Section 4.4(j) herein is invoked, otherwise written
      approval shall be requested for changes which may impact safety, quality, or
      effectiveness of Product, which approval shall not be unreasonably withheld
      or
      delayed; if an MDR reportable event, as described in CFR Part 803, to a patient
      treated with the Product is found to be the result of a change in the processes
      used by CDI for the manufacture of the Product and the change was not
      pre-approved by SyntheMed prior to implementation, then the indemnification
      provided by SyntheMed as described in Section 14.2 (ii) to CDI shall not apply
      to such event;

    

    f.
      obtain
      written approval from SyntheMed prior to implementing changes to Product or
      process Specifications;

    

    g.
      investigate diligently, at SyntheMed’s request, complaints or adverse events
      which relate to the Product’s manufacture or production issues, and report back
      to SyntheMed within seventy-two (72) hours of being notified by SyntheMed of
      any
      MDR reportable events, or within ten (10) days of being notified of any other
      complaint;

    

    h.
      contact SyntheMed regarding any complaints CDI receives relating to the Product,
      including notice of any adverse events within three business days of their
      receipt;

     

    i.
      utilize in the manufacture of the Product only Raw Polymer Material supplied
      by
      or on behalf of SyntheMed; and 

    

    j.
      follow
GMP
      regulations as described in 21 CFR Part 211 as it relates to the manufacture
      and
      supply of the Product. 

     

    4.2
      SyntheMed agrees to:

    

    a.
      ensure
      that CDI is timely provided, at no charge, with sufficient amounts of Raw
      Polymer Material in order to enable CDI to satisfy its manufacturing and
      delivery obligations with respect to the Product;

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    b.
      provide CDI with rolling twelve (12) month forecasts of SyntheMed's requirements
      of Product("Rolling Forecast") (Schedule 5). Such forecasts shall be prepared
      in
      good faith and provided on a quarterly basis. The first three months of any
      twelve month Rolling Forecast may be accompanied by firm Purchase Orders to
      purchase Product, which Purchase Orders shall be considered a purchase
      commitment ("Purchase Commitment"). SyntheMed may at any time cancel all or
      any
      portion of any Purchase Commitment, provided that SyntheMed shall, if such
      cancellation occurs after actual commencement of Product manufacture for the
      relevant Product Order, reimburse CDI for *** which shall be CDI's sole remedy
      for SyntheMed's cancellation; provided further that (i) CDI will attempt to
      minimize any losses associated with such inventory and (ii) CDI will reduce
      the
      Transfer Price of any Product provided to SyntheMed that contains inventory
      for
      which CDI has been reimbursed per
      this
      Section 4.2(b);

    

    c.
      investigate diligently all adverse events of which SyntheMed has knowledge
      or
      awareness, related to the Product, and promptly report such occurrences to
      CDI
      if in the good faith reasonable determination of SyntheMed, the same could
      reasonably have been attributable to activities of CDI. SyntheMed shall be
      responsible for the cost and execution of all medical device reporting ("MDR")
      in accordance with 21 CFR Part 803 and all vigilance reporting required in
      the
      markets where Products are sold; and

    

    d.
      except
      as otherwise set forth herein, be solely responsible for all necessary Approvals
      to market the Products including any re-approvals required due to, among other
      things, specification changes.

     

    5.
      ORDERING, PRICE AND PAYMENTS

    

    5.1
      Initial Transfer Price. SyntheMed shall pay the Transfer Price listed in
      Schedule 3 for the Product. 

    

    5.2
      Transfer Price Adjustment. The Transfer Price may be adjusted from time to
      time
      throughout the Term of the Agreement beginning at any time after *** for factors
      such as, but not limited to, changes in raw material costs (not including pass
      through cost materials which will be adjusted when and if changes occur, both
      higher or lower costs), labor costs, regulatory costs, or product liability
      costs. However, such adjustment shall not exceed, unless otherwise agreed,
      the
      consumer price index for the Midwest Urban MSA area, as published by the U.S.
      Department of Labor, Bureau of Labor Statistics and in effect on the
      aforementioned date. Pricing adjustments will occur no more than *** and, unless
      otherwise agreed, shall become effective no earlier than 30 days after written
      notice thereof is provided to SyntheMed. CDI shall include in its notification
      a
      detailed justification for all adjustments. Such adjusted Transfer Price shall
      be reflected in any CDI invoices issued for Product shipped after the effective
      date of adjustment. If
      price
      adjustments are related to changes in the Product Specifications requested
      by
      SyntheMed, CDI will propose new pricing which will be negotiated in good faith
      and, subject to the succeeding sentence, and will be effective immediately
      upon
      shipment of Products meeting the new Product Specifications.

     

    5.3
      Purchase Orders. SyntheMed shall provide CDI with firm written purchase orders
      ("Purchase Orders") for Production accordance with the established lead-times
      set forth in Schedule 3, and consistent with Purchase Commitments; provided,
      that SyntheMed shall have the right, prior to the date of manufacture, to issue
      binding, written change orders to increase or decrease the quantity of such
      Purchase Orders. CDI shall use its commercially reasonable efforts to comply
      with any reasonable revisions to Purchase Order requirements. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.4
      Acknowledgment. Within five (5) business days after receipt of a written
      Purchase Order from SyntheMed, CDI shall acknowledge such receipt in
      writing.

    

    5.5
      Shipping. CDI shall ship Product to the Designated Facility or other SyntheMed
      designated location *** in accordance with the shipment packaging materials
      and
      shipping method specified by SyntheMed. *** shall pay the actual documented
      cost
      of shipping Product to the shipping destination. *** shall be responsible for
      all insurance, custom's charges and taxes related to shipping. Title to and
      risk
      of loss for all Product supplied to SyntheMed hereunder shall pass from
      CDI to
      SyntheMed upon acceptance of the shipment by the carrier at the distributors
      or
      customers facility. 

    5.6
      Invoices. CDI shall invoice SyntheMed for the aggregate Product which it
      manufactures, upon shipment to the Designated Facility, and SyntheMed shall
      pay
      each invoice within ***. All payments shall be in United States currency.

    

    5.7
      Tax
Withholding.
      If
      SyntheMed in good faith concludes that tax withholdings under the laws of any
      country are required with respect to payments to CDI, it shall withhold the
      required amount and pay it to the appropriate Governmental Authority, and shall
      promptly provide CDI with original receipts or other evidence reasonably
      required and sufficient to allow CDI to document such tax withholdings
      adequately for purposes of claiming foreign tax credits and similar
      benefits.

     

    6.
      QUALITY CONTROL AND REGULATORY COMPLIANCE

    

    6.1
      No
      Product shall be released for shipment by CDI unless and until SyntheMed shall
      have been notified by CDI of completion of Product manufacture and afforded
      full
      opportunity to test the Product to ensure compliance with the Product
      Specifications. Such testing may be accomplished either by SyntheMed directly
      or
      by a third party designated by SyntheMed, which designee may be an independent
      testing laboratory. Each lot of Product manufactured by CDI shall have CDI's
      Certificate of Conformance and Certificate of Analysis, the form of which is
      attached as Schedule 4_.

    

    6.2
      SyntheMed or its designee shall be entitled to reject any shipment of Product
      or
      portion thereof that is not manufactured and/or delivered in accordance with
      the
      terms of this Agreement. SyntheMed shall notify CDI of the existence and nature
      of any non-compliance or defect and CDI shall have a reasonable opportunity,
      not
      to exceed five (5) business days from receipt of such notification
      and
      receipt
      of the defective product if applicable, to inspect such defective material
      and/or Product.
      All
      defective Product must be returned to CDI for inspection. SyntheMed
      shall have no obligation to pay for any Product that is subject to a
      valid
      claim of
      non-compliance or defect
      that is
      not remedied.
      If CDI
      fails to timely inspect or if such inspection confirms such non-compliance
      or
      defect, CDI shall promptly replace such non-compliant or defective Product
      at
      its own cost and expense
      provided
      SyntheMed will provide replacement Raw Polymer Material to CDI. The aggregate
      cost expense to CDI shall not exceed *** In
      the
      case of confirmed
      non-compliant
      Product
      previously shipped by CDI, unless CDI provides SyntheMed with detailed written
      instructions to return or dispose of such
      Product
      within 5 business days of a request by SyntheMed, SyntheMed may dispose of
      such
      Product as it sees fit and CDI shall promptly reimburse SyntheMed for all
      direct, out-of-pocket costs incurred by SyntheMed in such
      disposition.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.3
      If,
      after CDI’s inspections of such Product, the parties disagree as to the
      Product’s conformance to the Product Specifications or whether the Product has
      such a defect, either party may deliver the Product to an independent
      third-party laboratory, mutually and reasonably acceptable to both parties,
      for
      analytical testing to confirm the Product’s conformance to the Product
      Specifications or the presence or absence of defects. All costs associated
      with
      such third-party testing shall be at CDI’s expense unless the independent Party
      review concludes the product conformed to specifications. No inspection or
      testing of or payment for Product by SyntheMed or any third-party agent of
      SyntheMed shall constitute acceptance by SyntheMed thereof, nor shall any such
      inspection or testing be in lieu or substitution of any obligation of CDI for
      testing, inspection and quality control as provided in the Product
      Specifications or under applicable local, state, or federal laws, rules,
      regulations, standards, codes or statutes.

    

    6.4
      In
      the event of an audit by a Regulatory Authority at SyntheMed which involves
      any
      Product, SyntheMed shall notify CDI of such audit promptly after receiving
      notice thereof. Pursuant to such notice of audit, CDI shall supply SyntheMed
      with quality control documents related to the Product, within one business
      day
      from a request by SyntheMed.

    

    6.5
      CDI
      shall promptly notify SyntheMed whenever a request for a plant inspection is
      received from the FDA or other Regulatory Authority that relates in any way
      to
      the Product, and shall promptly advise SyntheMed of any scheduled or unscheduled
      Product or Product related FDA or other Regulatory Authority inspection and
      the
      progress and results thereof. A copy of Form 483 observations or other
      applicable reports, which apply to Product shall be supplied to SyntheMed within
      one business day of receipt. CDI, at CDI's sole expense, shall promptly take
      steps to remedy any valid deficiencies found by the FDA or other Regulatory
      Authority inspectors relating to the manufacture of Product, and to respond
      promptly in writing to the Form 483 observations. CDI shall provide SyntheMed
      with a copy of its responses to any Form 483 observations relating to the
      Products in advance of their submission to FDA, and shall notify SyntheMed
      of
      the date such responses are filed with the FDA.

    

    6.6
      CDI
      shall not conduct a voluntary recall of Product without prior full consultation
      with SyntheMed regarding the ramifications, costs and regulatory strategies
      associated with such a recall. 

    

    6.7
      SyntheMed and CDI shall assist and cooperate with each other in giving effect
      to
      any "Recall," as that term is defined in 21 CFR 810.2. CDI shall be responsible
      for the manufacturing cost (based
      upon SyntheMed’s actual out-of-pocket cost) of
      Product replacements as per this Agreement
      of any
      Recall,
      but
      only to the extent
      caused
      by CDI's shipment of Products that did not meet Product
      Specifications
      and
      the
      reasonable related
      costs
      associated with return and reshipment including, without limitation, any direct
      costs associated with the shipment and reshipment and replacement of such
      Products. CDI shall have no other obligations with respect to such Recalls,
      except as may be provided for in Section 14.1. SyntheMed shall, however, bear
      all costs and expenses of any recall caused by Product design, or other acts
      not
      attributable to CDI causing a Recall to occur, including, without limitation,
      costs of notifying customers and costs associated with the shipment and
      reshipment and replacement of such Products. For purposes of clarification,
      CDI
      is not responsible for any costs associated with loss of sales.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.8
      CDI
      shall provide SyntheMed (or its third party designee) access to its sites and
      quality system records for the purpose of auditing and reviewing the sites
      for
      compliance with CDI’s obligations under this Agreement (the "Review"). Any
      information obtained by SyntheMed as a result of such Review shall be subject
      to
      the provisions of Article 9 hereof. Such Review shall be made during regular
      business hours, upon reasonable notice and at reasonable intervals. CDI shall
      respond to any findings under such Review in writing within thirty (30) days,
      unless otherwise agreed; additionally, SyntheMed shall have the right to
      re-Review any specific records to establish that any findings have been
      corrected.

    

    6.9
      CDI
      shall cooperate with SyntheMed to provide any authorizations, documents,
      information, testing protocols and procedures in CDI's possession subject to
      Section 3, or take such other actions, which SyntheMed may reasonably request
      in
      order to obtain or maintain any registration, approval, clearance, certification
      or other authorization with or from any federal, state, local or foreign
      government agency or any self-regulatory body. 

    

    6.10
      Each
      party shall keep and maintain complete and accurate records necessary for
      regulatory compliance for a period of at least five years (5) years after the
      product has been released for commercial distribution. 

    

    6.11
      The
      signed SyntheMed Quality Agreement (schedule 6) will be reviewed and updated
      as
      required per any applicable regulatory requirement changes. 

    

    6.12
      All
      documents specifically related to the manufacturing of Product (i.e. batch
      records, manufacturing procedures, FDA/ISO required documentation) will be
      the
      property of Synthemed and will be provided if and when requested. 

    

    7.
      INTELLECTUAL PROPERTY RIGHTS

    

    7.1
      CDI
      and SyntheMed acknowledge the exclusive right, title, interest and goodwill
      in
      and to each trademark, trade name or other Intellectual Property right owned
      by
      the other party. Neither CDI nor SyntheMed will, at any time or in any way,
      do
      or cause to be done any act, or omission, or thing to challenge, contest or
      in
      any way impair the right, title, and interest of the other party. Except as
      otherwise provided in this Agreement, CDI and SyntheMed shall not in any manner
      represent that either has any rights in or to any trademark, trade name or
      other
      Intellectual Property right of the other party and each acknowledges that the
      permitted use of any trademark, trade name or other Intellectual Property right
      of the other shall not create any ownership right, title, or interest in or
      to
      any trademark, trade name or other Intellectual Property right of the other
      party.

    

    8.
      CONFIDENTIAL INFORMATION

    

    8.1
      The
      parties agree:

    

    a.
      To
      receive and hold all Confidential Information in strict confidence and to
      disclose such Confidential Information only to its employees and representatives
      who have a need to know the Confidential Information. Without affecting the
      generality of the foregoing, the Receiving Party will exercise no less care
      to
      safeguard the Confidential Information than it exercises in safeguarding its
      own
      Confidential Information and will be responsible for any breach of the
      provisions of Article 9 by its employees and representatives (including its
      employees who, subsequent to the first disclosure of Confidential Information,
      become former employees);

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    b.
      That
      the Receiving Party shall not, directly or indirectly, disclose or use the
      Confidential Information, in whole or in part, for any purposes other than
      those
      contemplated herein. Without affecting the generality of the foregoing, the
      Receiving Party shall not, directly or indirectly, disclose any such
      Confidential Information to any third party or use the Confidential Information
      for the benefit of any third party;

    

    c.
      That
      neither party shall, without the prior written consent of the other party,
      disclose to any third party Confidential Information and or any of the terms,
      conditions or other facts with respect to the business relationship of the
      parties. Any approved disclosure made shall be no more extensive than is
      necessary to meet the minimum requirement imposed on the party making such
      disclosure; it being understood that CDI consents to such public disclosure
      regarding the business relationship of the parties as SyntheMed or its counsel
      deems necessary or appropriate to comply with applicable law;

    

    d.
      That
      money damages may not be a sufficient remedy for a breach of this Article 8
      and
      that the non-breaching party may be entitled to equitable relief (including,
      but
      not limited to, a temporary restraining order or an injunction or specific
      performance), without posting bond or establishing monetary damages, in the
      event of any breach of the provisions of this Article 8; 

    

    e.
      The
      furnishing of Confidential Information hereunder shall not constitute or be
      construed as a grant of any express or implied license or other right, or a
      covenant not to sue or forbearance from any other right of action by the
      Disclosing Party to the Receiving Party under any of the Disclosing Party's
      patents or other Intellectual Property rights;

    

    f.
      Upon
      the Disclosing Party's request at any time, or upon termination or expiration
      of
      this Agreement, the Receiving Party shall immediately return or destroy all
      written, graphic and other tangible forms of the Confidential Information (and
      all copies thereof) in the Receiving Party's possession or control except for
      one copy which may be retained by the party's legal counsel for legal archival
      purposes only; and

    

    g.
      The
      obligations of the Receiving Party regarding disclosure and use of Confidential
      Information shall survive the termination of this Agreement and shall continue
      for five (5) years after the date of termination of this Agreement.

    

    9.
      PUBLICITY

    

    9.1
      During the Term and thereafter, except as required by applicable law, neither
      party shall, without securing the prior written consent of the other party,
      release the terms of this Agreement to any third party or publicly announce
      the
      terms of this Agreement. Notwithstanding the foregoing, during the Term and
      thereafter, SyntheMed may, in addition to the disclosure permitted under Section
      8.1 above, disclose the existence and general nature of this Agreement in press
      releases, shareholder reports, quarterly and annual corporate reports,
      Securities and Exchange Commission filings and public or private equity
      offerings. In addition, SyntheMed may provide a copy of this Agreement as part
      of a due diligence review in connection with a merger, an acquisition, or a
      public or private equity offering, so long as such review is under the auspices
      of an appropriate confidentiality agreement. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    10.
      WARRANTIES AND REPRESENTATIONS

    

    10.1
      Subject to the provisions set forth in this Section 10.1 and Section 10.4,
      CDI
      warrants: (i) that all Product delivered hereunder shall conform in all material
      respects to Product Specifications at the time of shipment; (ii) that all
      Product shall be manufactured substantially in accordance with (a) QSR, (b)
      the
      pertinent rules and regulations of the FDA and (c) the EU Medical Device
      Directive; and (iii) that no Product delivered hereunder shall at time of
      shipment be adulterated or misbranded within the meaning of the Act, or within
      the meaning of any applicable state or municipal law in which the definitions
      of
      adulteration and misbranding are substantially the same as those contained
      in
      the Act, provided such laws are conCDItuted and effective at the time of such
      delivery (collectively, the "Product Warranties"). These Product Warranties
      shall be null and void and shall not apply to any Product which is in any way
      altered, modified, damaged or replaced by any person other than CDI or its
      agents or which is abused or misused, whether intentionally or accidentally.
      

    

    10.2
      Each
      party represents and warrants that it is and will remain in material compliance
      with all applicable federal, state and local laws, regulations and orders as
      they may apply to this Agreement.

    

    10.3
      CDI
      and SyntheMed each represent and warrant for itself that (i) it is duly
      incorporated and validly existing and in good standing under the laws of the
      state of its incorporation, (ii) it has the full right, power, and authority
      to
      execute and perform this Agreement, (iii) this Agreement does not conflict
      with
      or otherwise result in a breach of any agreement to which such party is a party
      or to which it is bound, and (iv) this Agreement represents a valid, legally
      binding obligation of it, enforceable against it in accordance with its
      terms.

    

    10.4
      EXCEPT AS OTHERWISE EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT, NEITHER
      PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL
      OR SPECIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS
      AGREEMENT.

    

    11.
      ASSIGNMENT

    

    11.1
      Neither party may assign or transfer this Agreement, in whole or in part, to
      a
      third party without the prior written consent of the other party, which consent
      shall not be unreasonably withheld, conditioned or delayed. Notwithstanding
      the
      foregoing, SyntheMed may assign this Agreement to any of its affiliates, or
      in
      connection with the sale of that part of its business relating to the Products
      provided that in no event shall any such assignment release SyntheMed from
      its
      responsibilities under this Agreement unless the assignee has agreed in writing
      to assume all the obligations of SyntheMed hereunder 

    

    11.2
      This
      Agreement will bind and inure to the benefit of the respective successors and
      permitted assigns, whether so expressed or not.

    

    12.
      INSURANCE

    

    12.1
      CDI
      and SyntheMed shall each obtain and maintain at all times during the Term
      following the first Purchase Order hereunder, product liability insurance in
      the
      amount of at least *** per occurrence and *** umbrella coverage and shall
      deliver to the other party a certificate evidencing such insurance.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

       
      13.
      TERMINATION 

    

    13.1
      In
      addition to any other rights of termination granted to the parties in this
      Agreement, each party shall have the right, but not the obligation, to terminate
      this Agreement upon notice to the other party under the following
      circumstances:

    

    i.
      for no
      reason, upon six (6) months’ prior notice to the other party; 

    

    ii.
      if
      the other party declares bankruptcy, makes an assignment for the benefit of
      its
      creditors, if any proceedings take place for arrangement for the appointment
      of
      a receiver or trustee to take possession of such party's assets, or any other
      proceeding under law for the entry of an order for the relief of creditors
      of
      such party shall be instituted the other party which shall not have been
      vacated, discharged, stayed, satisfied or bonded pending appeal within
      forty-five (45) days from the entry thereof or if such party shall become
      insolvent; or

    

    iii.
      upon
      a material breach of this Agreement by the other party, which breach is not
      remedied or cured within sixty (60) days’ notice thereof by the terminating
      party.

    

    13.2
      Upon
      termination or expiration of this Agreement for any reason, including the end
      of
      the Term as defined in Section 2, nothing herein shall be construed to release
      either party from any obligation, which matured prior to the effective date
      of
      termination, or which by their terms are intended to continue.

    

    14.
      INDEMNIFICATION

    

    14.1
      CDI
      agrees to indemnify, defend and hold SyntheMed and any of its officers,
      directors, affiliates, employees, sales agents, successors and permitted assigns
      (each, an "SyntheMed Indemnified
      Party") harmless from and against any and all Claims of third parties for any
      Losses but
      only
      to the extent arising
      out of or resulting from: (i) the failure of CDI to perform
      its obligations under this Agreement;
      (ii)
      any CDI breach of a representation, warranty, covenant or obligation in this
      Agreement; or (iii) any negligence or willful misconduct of CDI or its
      representatives, directors, officers, employees and agents, in
      connection with the activities contemplated under this Agreement, in each case,
      only to the extent such Claims listed in Section 14.1 (i -
      iii)
      are
      not (a)
      due to the negligence or willful misconduct of a SyntheMed Indemnified Party,
      or
      (b) otherwise subject to indemnification under Section 14.2.

    

    14.2
      SyntheMed agrees to indemnify, defend and hold CDI and any of its officers,
      directors, affiliates, employees, sales agents, successors and permitted assigns
      (each, a "CDI Indemnified Party") harmless from and against any and all Claims
      of third parties for any Losses arising out of or resulting from: (i) any
      SyntheMed breach of a representation, warranty, covenant or obligation in this
      Agreement; (ii) any personal injury or death resulting from use of the Product
      by end-users
      or other
      product liability claim;
      or
      (iii)
      any negligence or willful misconduct of SyntheMed or its representatives,
      directors, officers, employees and agents, in connection with the activities
      contemplated under this Agreement
      in each
      case, only to the extent such Claims listed in Section 14.2 (i - iii) are not
      (a) due to the negligence or willful misconduct of a CDI Indemnified Party,
      or
      (b) otherwise subject to indemnification under Section 14.1.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    14.3
      To
      receive the indemnities contained in this Section 14, the party entitled to
      indemnification hereunder (the "Indemnified Party") must provide the party
      obligated to provide indemnification hereunder (the "Indemnifying Party") with
      (i) reasonably prompt notice in writing of any such Claim or action, (ii)
      information and reasonable assistance, at the Indemnifying Party's expense,
      as
      necessary or appropriate to defend or settle such Claim or action, and (iii)
      full authority to defend or settle the Claim or suit. The Indemnified Party
      shall have the right to employ separate counsel and participate in the defense
      of any Claim or action, at its own expense. Except as provided in the last
      sentence of this Section 14.3, the Indemnified Party may not settle any Claim
      or
      action under this Section 14 on behalf of the Indemnifying Party without first
      obtaining the Indemnifying Party's written permission, and so long as the
      Indemnifying Party is diligently conducting a defense as provided herein, it
      shall not be liable for the attorneys' fees or expenses of the Indemnified
      Party. If an Indemnified Party provides notice of a Claim that is subject to
      indemnification in accordance herewith and is not notified within ten (10)
      days
      that the Indemnifying Party intends to defend such Claim, the Indemnified Party
      shall be entitled to defend, settle and/or compromise such Claim, subject to
      the
      indemnification provided for herein. Nothing in this provision, however, shall
      permit either party to enter into a settlement that imposes an obligation on
      the
      other party requiring them to take any
      affirmative action or refrain from any act, unless such other party consents
      to
      such settlement.
      Notwithstanding anything in this Agreement to the contrary, SyntheMed shall
      not
      be liable or responsible for indirect, speculative, punitive or consequential
      damages of CDI, and CDI shall not be liable or responsible for indirect,
      speculative, punitive or consequential damages of SyntheMed. 

    

    15.
      MISCELLANEOUS 

    

    15.1
      Independent Contractor. Neither party shall have the right, power or authority
      to assume or create any obligations or responsibility expressed or implied,
      on
      behalf of, or in the name of, the other party, or to bind the other party in
      any
      manner or to any extent whatsoever, without the prior written approval and
      acceptance of the other party. Each of the parties hereto is an independent
      contractor for the purposes of this Agreement and nothing contained herein
      shall
      be deemed or construed to create the relationship of agency, partnership or
      joint venture or any other association except that of an independent contractor
      relationship.

    

    15.2
      Amendment and Waiver. This Agreement may be amended, and any provision of this
      Agreement may be waived, provided that any such amendment or waiver will be
      binding on each party only if such amendment or waiver is set forth in a writing
      executed by such parties. Waiver of a breach of the Agreement shall not
      constitute a waiver of any other subsequent breach of the Agreement. The waiver
      of any provision of this Agreement shall not constitute a continuing waiver
      of
      that provision or a waiver of any other provision of this
      Agreement.

    

    15.3
      Notices. All notices, demands and other communications to be given or delivered
      under or by reason of the provisions of this Agreement shall be in writing
      and
      shall be deemed to have been given when sent by facsimile transmission with
      acknowledged returned receipt, personally delivered or mailed by overnight
      mail,
      return receipt requested. Notices demands and communications shall, unless
      another address or individual is specified in writing, be sent to the addresses
      set forth as follows:

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    If
      to
      SyntheMed:      SyntheMed,
      Inc.

                200
      Middlesex-Essex
      Turnpike, Suite 210

                Iselin,
      NJ
      08830

                Attention:
      President

    

    If
      to
      CDI:                   
CDI,
      Inc.

                9079
      Tyler
      Boulevard, 

                Mentor,
      OH
      44060

                Attention:
      President

     

    15.4
      Severability. Whenever possible, each provision of this Agreement will be
      interpreted in such a manner as to be effective and valid under applicable
      law,
      but if any provision of this Agreement is held to be prohibited by or invalid
      under applicable law, such provision will be ineffective only to the extent
      of
      such prohibition or invalidity, without invalidating the remainder of such
      provision or the remaining provisions of this Agreement.

    

    15.5
      Complete Agreement. This Agreement and the documents referred to herein contain
      the complete agreement between the parties and supersede all prior
      understandings, agreements and representations by or between the parties,
      written or oral, which may have related to the subject matter hereof in any
      way.

    

    15.6
      Counterparts. This Agreement may be executed in one or more counterparts all
      of
      which taken together will constitute one and the same instrument.

    

    15.7
      Governing Law. The law of the State of New Jersey will govern, without regard
      to
      the conflicts of law provisions thereof, all questions concerning the
      construction, validity and interpretation of this Agreement and the performance
      of the obligations imposed by this Agreement.

    

    15.8
      Headings. Section headings used in this Agreement are for convenience only
      and
      form no part or in any way modify or define the text of meaning or any provision
      of this Agreement.

    

    15.9
      Force Majeure. In the event that any party is prevented from performing, or
      is
      unable to perform, any of its obligations under this Agreement due to any act
      of
      God, fire, casualty, flood, war, strike, lock out, failure of public utilities,
      injunction or any act, exercise, assertion or requirement of governmental
      authority, epidemic, destruction of production facilities, any act of declared
      or undeclared war or of a public enemy, or any riot or insurrection, any
      nuclear, biological, chemical or similar attack, any act of terrorism, or any
      similar
      occurrence
      cause
      outside
      the reasonable control of that party, and if such party shall have used its
      best
      efforts to avoid such occurrence and minimize its duration and has given prompt
      written notice to the other party, then the affected party's performance shall
      be excused and the time for performance shall except as otherwise provided
      for
      in this Agreement, be extended for the period of delay or inability to perform
      due to such occurrence.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    15.10
      Remedies. Unless otherwise expressly stated, any remedy expressly provided
      for
      herein shall not be deemed to be a limitation on any remedy for any such
      situation or occurrence.

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement through
      their

    duly
      authorized representatives as of the date first written above.

     

    
      
        	
                SYNTHEMED,
                  INC.

              	
                CDI,
                  INC.

              
	 	 
	 	 
	 	 
	
                By:
                  /S/Robert P. Hickey

              	
                By:
                  /S/James H. Duvall

              
	
                Signature

              	
                Signature

              
	 	 
	
                Robert
                  P. Hickey

              	
                James
                  H. Duvall

              
	
                Name

              	
                Name

              
	 	 
	
                President
                  & CEO

              	
                President

              
	
                Title

              	
                Title

              
	 	 
	
                3/30/07

              	
                3-29-07

              
	
                Date

              	
                Date

              

      

    

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    List
      of Schedules

    

    1. 
       Raw Polymer Material specification

    2. 
       Product Specifications (Raw Material Film)

    3.  
      CDI Transfer Price, Lead Time requirements

    4.  
      Finished Product Certificate of Conformance/Analysis (example)

    5.  
      SyntheMed Product Forecast

    6.  
      SyntheMed Quality Agreement

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    SCHEDULE
      1

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    
      	 	
              Material
                Specification

            	 

    

    

    1.
       DESCRIPTION

    Material:***

    

    2.  MATERIAL
      VENDORS 

    BioVectra
      - produces the material

    Chem
      Development Inc. (CDI) - receives material for further processing

    

    3. SPECIFICATION
      

    The
      following is the criteria used in order to demonstrate that each lot of the
      Dry
      Raw Material Polymer Powder meets its design characteristics prior to being
      released for further processing. Each criterion is tested on a lot by lot basis
      at BioVectra. The results are reviewed and approved by Synthemed and if
      acceptable, the material is released to CDI for further processing. At CDI
      receiving inspection, the product will be tested or accepted via a vendor
      certification. The methods and criteria of acceptance at receiving will be
      documented and agreed upon in advance by SyntheMed.

     

    ***

    

    4.
       RESPONSIBILITIES
      

    

    
      	 	
              4.1

            	
              BioVectra
                is responsible for the manufacturing of the material. BioVectra will
                be
                responsible for assuring the material meets all the specified criteria
                as
                defined in section 3.

            

    

    
      	 	
              4.2
                

            	
              CDI
                is responsible for the incoming receipt, inspection and release of
                material for further processing.

            

    

    

    5. RECEIVING/STORAGE

     

    
      	 	
              5.1
                

            	
              CDI
                is responsible for the receipt and storage of material. These activities
                will be performed in accordance with documented procedures which
                are
                compliant with all applicable regulatory requirements. SyntheMed
                will
                evaluate these procedures as part of its vendor qualification and
                monitoring procedures.

            

    

    

    6. INSPECTION
      

    

    	6.1       
             	
            BioVectra
              is responsible for the inspection of the material prior to release
              for
              further distribution. These activities will be performed in accordance
              with documented procedures which are compliant with all applicable
              regulatory requirements. SyntheMed will evaluate these procedures as
              part
              of its vendor qualification and monitoring
              procedures.

          

    

    	6.2     
              	
            CDI
              is responsible for the inspection of the incoming material. These
              activities will be performed in accordance with documented procedures
              which are compliant with all applicable regulatory requirements. SyntheMed
              will evaluate these procedures as part of its vendor qualification
              and
              monitoring procedures

          

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    

    SCHEDULE
      2

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              Material
                Specification

            	 

    

    

    

    1.
       DESCRIPTION

    Material:
      ***

    

    3.  MATERIAL
      VENDORS 

    Chem
      Development Inc. (CDI) -produces the material

    Surgical
      Technologies, Inc. (STI) - receives material for further processing

    

    3. SPECIFICATION
      

    

    The
      following is the criteria used in order to demonstrate that each lot of the
      large dry component film roll meets its design characteristics prior to being
      released for further processing. Each criterion is tested on a lot by lot basis
      at CDI. The results are reviewed and approved by SyntheMed and if acceptable,
      the material is released to STI for further processing. At STI receiving
      inspection, the product will be tested or accepted via a vendor certification.
      The methods and criteria of acceptance at receiving will be documented and
      agreed upon in advance by SyntheMed.

    

     

    3.1  ***

    

    4.
       RESPONSIBILITIES
      

    

    
      	 	
              4.1

            	
              CDI
                is responsible for the manufacturing of the material. CDI will be
                responsible for assuring the material meets all the specified criteria
                as
                defined in section 3.

            

      	 	 	 

    

    4.2          
      STI
      is
      responsible for the receipt, inspection and release of material

    

    5. RECEIVING/STORAGE

     

    
      	 	
              5.1
                

            	
              STI
                is responsible for the receipt and storage of material. These activities
                will be performed in accordance with documented procedures which
                are
                compliant with all applicable regulatory requirements. SyntheMed
                will
                evaluate these procedures as part of its vendor qualification and
                monitoring procedures.

            

    

    

    6. INSPECTION
      

    

    	6.3        
              	
            CDI
              is responsible for the in process and final inspection of the material
              prior to release for further distribution. These activities will be
              performed in accordance with documented procedures which are compliant
              with all applicable regulatory requirements. SyntheMed will evaluate
              these
              procedures as part of its vendor qualification and monitoring
              procedures.

          

    

    	6.4        
             	
            STI
              is responsible for the receiving inspection of the incoming material.
              These activities will be performed in accordance with documented
              procedures which are compliant with all applicable regulatory
              requirements. SyntheMed will evaluate these procedures as part of its
              vendor qualification and monitoring
              procedures

          

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    SCHEDULE
      3 

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              Iselin,
                NJ 08830

            	 	 	 	 
	
              phone

            	
              732-404-1117

            	 	 	 	 
	
              fax

            	 	 	 	 	 
	
              email

            	 	 	 	 	 	 
	
              DATE

            	
              CHEMDEVELOPMENT
                CONTACT

            	
              TERMS

            	 
	
              02/15/07

            	
              Jim
                Duvall

            	
              ***

            	 
	
              QUANTITY

            	
              DESCRIPTION

            	
               

            	
              UNIT
                PRICE

            	
              AMOUNT

            	 
	
               

            	
               

            	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
              Repel
                CV Film Casting Quotation

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
              ***

            	
               

            	
               

            	 
	
               

            	 	 	
               

            	
               

            	 
	
               

            	 	 	
               

            	
               

            	 
	
               

            	
              ***

            	 	
               

            	
               

            	 
	
               

            	 	 	
               

            	
               

            	 
	
               

            	
              Coating
                cost per linear foot

            	 	
              ***

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
              ***

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
              All
                materials and any additional equipment cost will be
                charged

            	 	
               

            	
               

            	 
	
               

            	
              additionally
                with prior approval from Synthemed.

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
              A
                Purchase Order is required .

            	 	
               

            	
               

            	 
	
               

            	
               

            	 	
               

            	
               

            	 
	
               

            	
              Thank
                You

            	
               

            	
               

            	
               

            	 
	
              IF
                WE ARE ENGAGED TO PERFORM WORK ON YOUR BEHALF, WHETHER BY PURCHASE
                ORDER
                OR OTHER MEANS, OUR WORK IS

            	 
	
              PERFORMED
                SUBJECT TO THE LIMITATIONS
                OF LIABILITY
                PROVISION WRITTEN ON THE REVERSE SIDE OF THIS DOCUMENT.

            	 
	 	 	 	 	 	 
	 	 	 	
              Part
                of the

            	 
	 	 	 	 	 
	 	 	 	 	 	 	 

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    SCHEDULE
      4

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    
      	
              ChemDevelopment

            
	
              Specialists
                in Pilot Coating, Laminating & Formulating

            
	
              9079
                Tyler Blvd. • Mentor, OH 44060

            
	
              440-974-3080
                • fax 440-974-3081

            
	
              www.chemsultants.com

            
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	
              CERTIFICATE
                OF COMPLIANCE

            
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	
              SPECIFICATION
                #:

            	
              Synthemed001

            	 	 	 	 	 	 	 
	
              COATING
                LOT # :

            	
              112206

            	 	 	 	 	 	 	 	 	 
	
              COATING
                DATE # :

            	
              11/22/06

            	 	 	 	 	 	 	 	 	 
	
              LINER
                LOT # :

            	
              3026861

            	 	 	 	 	 	 	 	 	 
	
              POLYMER
                LOT # :

            	
              28004

            	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              A
                side Results

            	
              B
                side Results

            
	
              Characteristic

            	
              Unit

            	 	
              USL

            	 	
              LSL

            	 	
              Avg.

            	
              s

            	
              Avg.

            	
              s

            
	 	 	 	 	 	 	 	 	 	 	 
	
              ***

            	
              ***

            	 	
              ***

            	 	
              ***

            	 	
              ***

            	
              ***

            	
              ***

            	
              ***

            
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	
              Q.A.
                Reviewed and Approved:

            	
              Jim
                Duvall

            	 	 	
              Date:

            	
              12/06/06

            	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	
              It
                is hereby certified all the products in this Coating Lot meets the
                established 

            
	
              specifications
                when tested in accordance with the referenced methods.

            
	
              Records
                substantiating the above statement are available upon
                request.

            
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    SCHEDULE
      5

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    

    SCHEDULE
      5

    

    Long-term
      Forecast

    

    ***

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    

    SCHEDULE
      6

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    SYNTHEMED
      QUALITY AGREEMENT

    

    

    This
      Quality Agreement (the "Agreement") is made as of November 10, 2006 between
      SyntheMed, Inc. and ChemDevelopment with its principal office at 19349 Hamilton
      Drive, Mentor, OH 440607 

    

    Purpose
      

    The
      purpose of this Agreement is to set forth the quality arrangements for ensuring
      that the manufacture, packaging, quality control and release of the Raw Material
      Film Sheet (the "Agreement Product") shall take place in accordance with
      applicable sections of the Quality System Regulations (Good Manufacturing
      Practice) as detailed in Title 21, Code of Federal Regulations, Part 820, US
      Food and Drug Administration, or the requirements of the European Medical Device
      Directives and ISO 13485. 

    

    Responsibilities
      

    

    1.
       Audits 

    

    ChemDevelopment
      shall give all reasonable access to its facilities to satisfy all applicable
      regulatory audit requirements. Any such audits will determine if ChemDevelopment
      has adequate premises, equipment, systems and a staff with sufficient knowledge
      and training to carry out satisfactorily the manufacture, assembly, packaging
      and testing of the Agreement Product destined to be further processed by
      SyntheMed, Inc. or its designee.

     

    2.
       Material
      Specifications

    

    ChemDevelopment
      shall manufacture the Agreement Product according to the methods agreed to
      by
      SyntheMed. The information/specifications to be provided to ChemDevelopment
      may
      include but may not be limited to: 

    The
      manufacturing formula 

    The
      manufacturing method

    The
      environmental conditions required 

    The
      master batch manufacturing record 

    The
      finished product specification 

    All
      analytical methods 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3.
       Change
      control 

    

    ChemDevelopment
      shall not, except with the prior written consent of SyntheMed (which consent
      shall not be unreasonably withheld or delayed), change or cause to be changed
      any materials, equipment, or method of production or testing related to the
      Agreement Product provided however, that any such change for which SyntheMed
      has
      given its prior written consent shall also comply in all respects with all
      applicable legal requirements, and provided further, that in the event any
      change is required by any legal requirement and SyntheMed does not consent
      to
      such change within a reasonable period of time, ChemDevelopment shall be excused
      from all performance hereunder. 

    

    4.
       Documentation
      

    ChemDevelopment
      will create the documentation to produce the Agreement Product to satisfy the
      appropriate regulatory requirements. These documents will be reviewed and
      approved by SyntheMed. They will be subject to Change Control as specified
      in
      section 3 above. ChemDevelopment will provide control of all documentation
      as
      required under all applicable regulations and as part of the ChemDevelopment
      quality system. 

    

    5.
       Raw
      Material Purchasing/Testing 

    ChemDevelopment
      shall be responsible for the assessment of all ingredients to be used in the
      manufacture of the Agreement Product in order to ensure compliance with the
      agreed upon specifications. ChemDevelopment will be responsible for qualifying
      all vendors for the ingredients they use other than what is supplied by
      SyntheMed (Dry Polymer Powder)

    

    6.
       In-Process
      Controls 

    ChemDevelopment
      shall be responsible for any agreed upon quality control testing required during
      the manufacture of the Agreement Product. ChemDevelopment shall advise SyntheMed
      of any significant changes prior to their implementation in the in-process
      controls (ref section 3 above). 

    

    7.
       Finished
      Product Testing 

    ChemDevelopment
      shall be responsible for testing each batch of the Agreement Product (including
      any testing requiring to be performed by a third party laboratory) to ensure
      its
      compliance with the finished product specifications agreed to by SyntheMed.
      ChemDevelopment shall provide and/or make available a record of the test results
      for every batch manufactured and details of all out of specification
      investigations. SyntheMed will review the documentation and approve the release
      of each batch of material unless otherwise notified (see section 10).

    

    8.
       Stability 

    ChemDevelopment
      shall assist as needed in ensuring the generation of the stability data for
      the
      Agreement Product.

    

    9.
       Storage.
      Delivery and Transportation 

    ChemDevelopment
      shall be responsible for the quality of the Agreement Product on its premises
      and be responsible for any subsequent deterioration of the Agreement Product
      due
      to its storage or handling. ChemDevelopment shall utilize agreed upon means
      for
      transportation for delivery of the Agreement Product to SyntheMed or its
      designee.

     

    10.
       Release
      Procedure 

    ChemDevelopment
      shall test (or have tested at a third party laboratory as agreed by SyntheMed)
      the Agreement Product to the full finished product specification in accordance
      with the requirements specified. SyntheMed shall be responsible for the final
      release of the Agreement Product according to agreed upon procedures.
      ChemDevelopment shall provide or have available: 

     

    
      	 	
              10.1
                

            	
              A
                Certificate of Analysis listing all test results for each batch of
                Agreement Product 

            

    

    
      	 	
              10.2
                

            	
              A
                copy of the manufacturing record for each batch of Agreement Product
                delivered or Certification that all manufacturing was completed in
                accordance with agreed upon
                procedures

            

    

    
      	 	
              10.3
                

            	
              A
                statement signed by a named senior QA person at ChemDevelopment stating
                that the batch has been manufactured in accordance with the specifications
                and in accordance with all applicable regulatory requirements.
                

            

    

    
      	 	
              10.4
                

            	
              Any
                other details or documents which may be agreed from time to time
                between
                the Quality Departments of ChemDevelopment and SyntheMed.
                

            

    

    
      	 	
              10.5
                

            	
              Information
                and copies of investigation reports relating to any batch deviation,
                out
                of specification result or non-compliance with regulatory requirements
                shall be communicated as soon as practicable to the Director, Quality
                Systems at SyntheMed. 

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    11. Retention
      Samples 

    ChemDevelopment
      shall keep adequate retention samples of the Agreement Product and raw materials
      as agreed to with SyntheMed.

    

    12. Rejection
      and Reworking 

    Prior
      to
      shipment of each batch supplied and where applicable, ChemDevelopment shall
      submit to Synthemed all available information regarding major deviations, out
      of
      specification results and investigations, or non-compliance with GMP.

    If
      a
      batch of the Agreement Product is rejected by for any reason, ChemDevelopment
      must advise SyntheMed of the occurrence thereof and any other relevant details.
      

    

    Rework
      of
      the Agreement Product is not permitted without the consent of SyntheMed. (The
      term 'rework' excludes any re-inspection activities that are specified in
      Company's approved procedures). 

    

    13. Recalls
      and Complaints 

    ChemDevelopment
      shall conduct any reasonable investigations requested by SyntheMed pursuant
      to
      complaints received on the batches of the Agreement Product. A report of such
      investigation shall be provided in timely fashion to the Quality Department
      of
      SyntheMed. In the event of a recall of the Agreement Product, ChemDevelopment’s
      responsibility is limited to supplying appropriate information relevant to
      any
      alleged product defect prompting such recall action. 

    

    14. Batch
      records 

    ChemDevelopment
      shall keep original copies of all records of manufacture for at least five
      (5)
      years from the date of manufacture, and shall notify before disposing of such
      records. 

    ChemDevelopment
      shall also keep records relating to the receipt, testing and use of raw
      materials and packaging components for at least five (5) years from the date
      of
      approval for use in manufacturing. 

    

    15.
       Sub-contracting 

    ChemDevelopment
      may sub-contract the manufacture, packaging or testing of the Agreement Product
      to another site, provided that (a) SyntheMed has been notified of the site
      and
      (b) SyntheMed has approved such site.

     

    16.
       Regulatory
      Requirements 

    ChemDevelopment
      shall provide manufacturing information as reasonably requested by SyntheMed
      in
      support of the preparation of any Regulatory submissions and/or requirements
      for
      the Agreement Product. 

    

    

    Approvals:

    

    SyntheMed      ChemDevelopment

    

    Date:
      _________________________  Date:
      _______________________       

    

    Name:
      _________________________  Name:
      ______________________

     

    Title:
      __________________________  Title:
      _______________________[CONFIDENTIAL
      PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
      COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THESE PORTIONS
      HAVE
      BEEN REPLACED THROUGHOUT THIS AGREEMENT AND SCHEDULES BY THE FOLLOWING SYMBOL:
      ***]

    

    SUPPLY
      AGREEMENT

    

    This
      AGREEMENT (the "Agreement") dated as of March 9, 2007(the "Effective Date")
      between Surgical Technology Inc., a Minnesota corporation, having its principal
      place of business at 292 East Lafayette Frontage Road, Saint Paul, Minnesota
      55107 (hereinafter referred to as "STI") and SyntheMed, Inc., a Delaware
      corporation, with an address at 200 Middlesex Essex Turnpike, Iselin NJ 08830
      (hereinafter referred to as "SyntheMed").

    

    WHEREAS,
      STI is a company engaged in, among other things, finishing and manufacturing
      of
      products for use in a wide variety of applications including medical
      applications;

    

    WHEREAS,
      SyntheMed is engaged
      in the development and commercialization of products designed to prevent or
      reduce the formation of adhesions following a broad range of surgical
      procedures, all of which are based on SyntheMed’s proprietary, bioresorbable
      polymer technology.

    

    WHEREAS,
      SyntheMed’s lead product, REPEL-CV, is classified as a medical device by the US
      Food and Drug Administration and is currently under review by the
      FDA.

    

    WHEREAS,
      STI has demonstrated its ability and capacity to produce finished devices in
      accordance with SyntheMed’s specifications; 

    

    WHEREAS,
      SyntheMed desires STI to provide services to assemble, package, sterilize
      (through a third party) and drop ship under SyntheMed’s label and direction
      SyntheMed’s REPEL-CV finished product, to its customers, and STI desires to
      provide services to assemble, package, sterilize (through a third party) and
      drop ship under SyntheMed’s label and direction such finished product on behalf
      of SyntheMed, all on the terms and conditions set forth herein. 

    

    NOW,
      THEREFORE, in consideration of the foregoing premises and the mutual covenants
      and agreements provided herein, the parties hereto, intending to be legally
      bound hereby, agree as follows:

    

    1.
      DEFINITIONS

    

    1.1.
      "Act" shall mean the Federal Food, Drug and Cosmetic Act.

    

    1.2.
      "Approval(s)" shall mean receipt from the FDA or other applicable Regulatory
      Authority of final approval, including any applicable pricing, final labeling
      or
      reimbursement approvals, necessary to manufacture, market and sell a Commercial
      Product in a country of the Territory.

    

    1.3.
      "SyntheMed Indemnified Party" shall have the meaning set forth in Section
      15.1.

    

    1.4.
      "Claim(s)" shall mean all charges, complaints, actions, suits, proceedings,
      hearings, investigations, claims and demands.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.5.
      "Commercial Product" shall mean SyntheMed’s finished product known as REPEL-CV.

    

    1.6.
      "Confidential Information" shall mean all oral or written information that
      is
      disclosed by either party (the "Disclosing Party") to the other party (the
      "Receiving Party"), or that the Receiving Party becomes aware of as a result
      of
      its discussions and work with the Disclosing Party, and that is not generally
      known to the public, including but not limited to, information of a technical
      nature such as trade secrets; manufacturing processes or devices or know-how;
      techniques, data, formulas, inventions, discoveries or innovations (whether
      or
      not patentable), specifications and characteristics of current products or
      products under development; research projects, methods and results; matters
      of a
      business nature such as information about costs, margins, pricing policies,
      markets, sales, suppliers and customers; product, marketing or strategic plans;
      financial information; personnel records and other information of a similar
      nature, provided, however, that Confidential Information shall not include
      any
      information that (i) is or becomes public knowledge without breach of the
      Receiving Party's obligations hereunder; (ii) is rightfully acquired by the
      Receiving Party from a third party that legally acquired the information and
      is
      not under a confidentiality restriction on disclosure or use; (iii) was already
      known to the Receiving Party prior to receipt from the Disclosing Party as
      evidenced by written and dated records; (iv) is independently developed by
      the
      Receiving Party;(v) is required to be disclosed by law or court order, provided
      that notice of the requirement is promptly delivered to the Disclosing Party
      in
      order to provide the Disclosing Party with an opportunity to challenge or limit
      the disclosure obligations; or (vi) is disclosed or used following the Receiving
      Party's receipt of express written consent from an authorized representative
      of
      the Disclosing Party. The Receiving Party shall have the burden of proof
      respecting any of the aforementioned events on which the Receiving Party relies
      as relieving it of any confidentiality restrictions hereunder. Written
      disclosures for which protection is sought must be obviously marked as
      "Confidential" or "Proprietary" and oral disclosures for which protection is
      sought must at the outset be clearly identified by the Disclosing Party as
      Confidential Information and submitted by the Disclosing Party in summary form
      to the Receiving Party, marked as above within thirty (30) days after
      disclosure; provided, however, that protection under Article 9 shall also be
      given to information that is not so marked if a reasonable person trained in
      research, development, manufacturing and marketing within the Field would assume
      that it is Confidential Information. For written information that would not
      normally appear to constitute confidential information, for the restrictions
      on
      Confidential Information to apply, a party must mark such information
      "CONFIDENTIAL."

    

    1.7.
      "Design History File" shall have the meaning set forth in Title 21 of the US
      Code of Federal Regulations, Part 820.

    

    1.8
      “Designated Facility” means the distributor or customer designated from time to
      time by SyntheMed for use or for sale of Commercial Product.

    

    1.9.
      "Disclosing Party" shall have the meaning set forth in Section 1.6.

    

    1.10.
      "FDA" shall have the meaning set forth in Section 3.1.

    

    1.11.
      "Governmental Authority" shall mean any court, tribunal, arbitrator, agency,
      department, legislative body, commission or other instrumentality of (a) any
      government of any country, (b) any foreign, federal, state, county, city or
      other political subdivision thereof or (c) any supranational body.

    

    1.12.
      "Initial Term" shall have the meaning set forth in Section 2.1.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    1.13.
      "Intellectual Property" shall mean all inventions, discoveries and innovations
      (whether patentable or unpatentable and whether or not reduced to practice),
      all
      improvements thereto, and all patents, patent rights, patent applications and
      invention disclosures, together with all reissues, continuations,
      continuations-in-part, revisions, extensions, and reexaminations thereof, all
      registered or unregistered trademarks, trade names and service marks, including
      all goodwill associated therewith, and copyrights, and all applications and
      registrations for any of the foregoing owned or controlled by or issued to
      SyntheMed or STI, and any trade secrets and know-how, in each case relating
      to
      the Commercial Products in the Field in the Territory.

    

    1.14.
      "STI Indemnified Party" shall have the meaning set forth in Section
      15.2.

    

    1.15.
      "Losses" shall mean any and all damages, awards, deficiencies, settlement
      amounts, defaults, assessments, fines, dues, penalties, costs, fees,
      liabilities, obligations, taxes, liens, losses, and expenses (including without
      limitation court costs, interest and reasonable fees of attorneys, accountants
      and other experts) incurred by or awarded to third parties and required to
      be
      paid to third parties with respect to a Claim by reason of any judgment, order,
      decree, stipulation or injunction, or any settlement subject to the
      indemnification provisions of this Agreement, together with all documented
      out-of-pocket costs and expenses incurred in complying with any judgments,
      orders, decrees, stipulations and injunctions that arise from or relate to
      a
      Claim of a third party.

    

    1.16.
      "MDR" shall have the meaning set forth in Section 4.2(c).

    

    1.17.
      “Raw Material Film” means large dry component film roll provided to STI by or on
      behalf of SyntheMed that meets specifications as described in Schedule 1.

    

    1.18.
      "Post Term Supply" shall have the meaning set forth in Section 2.1.

    

    1.19.
      "Product Specifications" shall mean the specifications detailing the Product,
      as
      shown in Schedule 2.

    

    1.20.
      "Product Warranties" shall have the meaning set forth in Section
      11.1.

    

    1.21.
      "Product" shall mean the coated polymer film meeting the Product
      Specifications.

    

    1.22.
      "Purchase Orders" shall have the meaning set forth in Section 5.3.

    

    1.23.
      "Purchase Commitment" shall have the meaning set forth in Section
      4.2(b).

    

    1.24.
      "QSR" shall mean the Quality System Regulation promulgated by the FDA under
      the
      Act or other applicable regulatory agencies of countries in which the Commercial
      Product will be sold as of the time of manufacture of the applicable Commercial
      Products; including ISO 13485, the European Union Council Medical Device
      Directives (the "EU Medical Device Directives"), and the Quality System
      Regulations as described in 21 CFR Part 820.

    

    1.25.
      "Receiving Party" shall have the meaning set forth in Section 1.7.

    

    1.26.
      "Regulatory Authority" shall mean an authority or authorities designated or
      otherwise recognized by a government for regulatory purposes in connection
      with
      protection and safety of the public health (e.g., FDA, Notified Bodies, Health
      Canada, EMEA) in any country where Commercial Product is to be
      sold.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.27.
      "Renewal Term" shall have the meaning set forth in Section 2.1.

    

    1.28.
      "Rolling Forecast" shall have the meaning set forth in Section
      4.2(b).

    

    1.29.
      "Term" shall have the meaning set forth in Section 2.1.

    

    1.30.
      "Transfer Price" shall mean the price paid by SyntheMed to STI for the Product,
      as set forth in Section 5.1 hereof.

    

    1.31.
      "USPTO" shall mean the United States Patent and Trademark Office.

    

    2.
      TERM

    

    2.1
      Term.
      This Agreement shall commence on the Effective Date and, unless earlier
      terminated as provided herein, continue for five (5) years thereafter (the
      "Initial Term"). The Initial Term shall be automatically extended for successive
      two (2) year terms (the "Renewal Terms"), unless written notice of any party's
      intention not to extend is provided by either party at least six (6) months
      prior to the expiration of the Initial Term or a Renewal Term (the Initial
      Term
      and the Renewal Terms are collectively referred to as the "Term"); however,
      should any such notice of non-renewal be given by STI, STI shall, if so
      requested by SyntheMed, supply Product(s) for up to an additional sixteen (16)
      months following the expiration of the then
      current
      Term (the "Post Term Supply") with price and delivery terms to be negotiated
      in
      good faith by both parties.

     

    3.
      REGULATORY APPROVAL OF THE COMMERCIAL PRODUCTS 

    

    3.1
      SyntheMed shall have responsibility for obtaining all necessary U.S. and foreign
      Approvals for the Commercial Products for use, sale, marketing and distribution.
      STI will cooperate with SyntheMed to the extent STI's participation is
      reasonably necessary or appropriate in order for SyntheMed to procure such
      Approval. Without limiting the generality of the foregoing, STI will make
      available to SyntheMed, without charge, information in STI's possession and
      control that is required to prepare submissions for Approval, as SyntheMed
      may
      reasonably request, and as is reasonably necessary to obtain Approvals. All
      information provided by STI hereunder shall be presented in a form which
      satisfies the requirements of applicable United States Food and Drug
      Administration (“FDA”) and other Regulatory Authority guidelines and/or
      regulations for such types of submissions seeking Approval. STI shall consult
      with SyntheMed prior to engaging in any communication with the FDA or other
      Regulatory Authority in connection with manufacture of Product or other
      activities covered under this Agreement and shall provide SyntheMed a reasonable
      opportunity to review and comment upon any such proposed communication, whether
      written or oral. STI shall provide to SyntheMed copies of any and all
      correspondence or other communications, whether written, oral or otherwise,
      between it and the FDA or such other Regulatory Authorities relating to the
      Product or Commercial Product or production of any part thereof. In the event
      FDA or other Regulatory Authority requests additional information from STI,
      STI
      shall fully and promptly cooperate and advise SyntheMed of the estimated date
      by
      which it will respond to such request,. 

     

    4.
      COMMERCIALIZATION AND SUPPLY

    

    4.1
      STI
      agrees to:

     

    a.
      manufacture, package, label, store and deliver the Product in accordance with
      the QSR.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    b.
      supply
      SyntheMed with all of SyntheMed’s requirements of Product consistent with the
      projected Rolling Forecasts (pursuant to Subsection 4.2(b));

    

    c.
      deliver Product hereunder to the Designated Facility or as otherwise directed
      by
      SyntheMed on the scheduled delivery dates as set forth in the relevant Purchase
      Orders described in Section 5.3; (NOTE: Delivery
      of 10 percent more or less than the quantity specified, shall constitute the
      fulfillment of the order, and the difference shall be paid for or allowed at
      the
      current price.)

     

    d.
      permit
      SyntheMed or its third party designee full opportunity to test the Product
      to
      ensure compliance with Product Specifications prior to delivery by STI, as
      provided in Section 7.1; 

    

    e.
      obtain
      written approval from SyntheMed prior to implementing any changes to the Product
      manufacturing process, raw materials, testing, systems, equipment, procedures,
      software, or facilities if Section 4.4(j) herein is invoked, otherwise written
      approval shall be requested for changes which may impact safety, quality, or
      effectiveness of Commercial Product, which approval shall not be unreasonably
      withheld or delayed; if an MDR reportable event, as described in CFR Part 803,
      to a patient treated with the Commercial Product is found to be the result
      of a
      change in the processes used by STI for the manufacture of the Product and
      the
      change was not pre-approved by SyntheMed prior to implementation, then the
      indemnification provided by SyntheMed as described in Section 15.2 (ii) to
      STI
      shall not apply to such event;

    

    f.
      obtain
      written approval from SyntheMed prior to implementing changes to Product
      Specifications;

    

    g.
      investigate diligently, at SyntheMed’s request, complaints or adverse events
      which relate to Product or Commercial Product manufacture or production issues,
      and report back to SyntheMed within seventy-two (72) hours of being notified
      by
      SyntheMed of any MDR reportable events, or within ten (10) days of being
      notified of any other complaint;

    

    h.
      contact SyntheMed regarding any complaints STI receives relating to the Product
      or Commercial Product, including notice of any adverse events within three
      business days of their receipt; 

     

    i.
      utilize in the manufacture of the Product only Raw Material Film supplied by
      or
      on behalf of SyntheMed; and 

    

    j.
      follow
      cGMP regulations as described in 21 CFR Part 211 as it relates to the
      manufacture and supply of the Product. 

    

    4.2
      SyntheMed agrees to:

    

    a.
      ensure
      that STI is timely provided, at no charge, with sufficient amounts of Polymer
      Film in order to enable STI to satisfy its manufacturing and delivery
      obligations with respect to the Products;

    

    b.
      provide STI with rolling twelve (12) month forecasts of SyntheMed's requirements
      of Product ("Rolling Forecast") (Schedule 5). Such forecasts shall be prepared
      in good faith and provided on a quarterly basis. The first three months of
      any
      twelve month Rolling Forecast may be accompanied by firm Purchase Orders to
      purchase Product, which Purchase Orders shall be considered a purchase
      commitment ("Purchase Commitment"). SyntheMed may at any time cancel all or
      any
      portion of any Purchase Commitment, provided that SyntheMed shall, if such
      cancellation occurs after actual commencement of Product manufacture for the
      relevant Product Order, reimburse STI for any and all non-recoverable inventory
      costs reasonably incurred by STI, which shall be STI's sole remedy for
      SyntheMed's cancellation; provided further that (i) STI will attempt to minimize
      any losses associated with such inventory and (ii) STI will reduce the Transfer
      Price of any Product provided to SyntheMed that contains inventory for which
      STI
      has been reimbursed per
      this
      Section 4.2(b);

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    c.
      investigate diligently all adverse events of which SyntheMed has knowledge
      or
      awareness, related to the Commercial Product, and promptly report such
      occurrences to STI if in the good faith reasonable determination of SyntheMed,
      the same could reasonably have been attributable to activities of STI. SyntheMed
      shall be responsible for the cost and execution of all medical device reporting
      ("MDR") in accordance with 21 CFR Part 803 and all vigilance reporting required
      in the markets where Commercial Products are sold; and

    

     d.
      except
      as otherwise set forth herein, be solely responsible for all necessary Approvals
      to market the Commercial Products including any re-approvals required due to,
      among other things, specification changes.

      

    5.
      ORDERING, PRICE AND PAYMENTS

    

    5.1
      Initial Transfer Price. SyntheMed shall pay the Transfer Price listed in
      Schedule 3 for the Product. 

    

    5.2
      Transfer Price Adjustment. The Transfer Price may be adjusted from time to
      time
      throughout the Term of the Agreement beginning at any time after the ***
      anniversary of the commencement of the Term for factors such as, but not limited
      to, changes in raw material costs, labor costs, regulatory costs, or product
      liability costs. However, such adjustment shall not exceed, unless otherwise
      agreed, the consumer price index for the Midwest Urban MSA area, as published
      by
      the U.S. Department of Labor, Bureau of Labor Statistics and in effect on the
      aforementioned date. If price adjustments are related to changes in the Product
      Specifications requested by SyntheMed, STI will propose new pricing which will
      be negotiated in good faith and, subject to the succeeding sentence, will be
      effective immediately upon shipment of Products meeting the new Product
      Specifications. Pricing adjustments will occur no more than *** and, unless
      otherwise agreed, shall become effective no earlier than six months after
      written notice thereof is provided to SyntheMed. STI shall include in its
      notification a detailed justification for all adjustments. Such adjusted
      Transfer Price shall be reflected in any STI invoices issued for Product shipped
      after the effective date of adjustment. 

    

    5.3
      Purchase Orders. SyntheMed shall provide STI with firm written purchase orders
      ("Purchase Orders") for Product in accordance with the lead-times set forth
      in
      Product Specifications and consistent with Purchase Commitments; provided,
      that
      SyntheMed shall have the right, prior to the date of manufacture, to issue
      binding, written change orders to increase or decrease the quantity of such
      Purchase Orders. STI shall use its commercially reasonable efforts to comply
      with any reasonable revisions to Purchase Order requirements. 

     

    5.4
      Acknowledgment. Within five (5) business days after receipt of a written
      Purchase Order from SyntheMed, STI shall acknowledge such receipt in
      writing.

    

    5.5
      Shipping. STI shall ship Product to the Designated Facility or other SyntheMed
      designated location F.O.B. *** in accordance with the shipment packaging
      materials and shipping method specified by SyntheMed. *** shall pay the actual
      documented cost of shipping Product to the shipping destination. *** shall
      be
      responsible for all insurance, custom's charges and taxes related to shipping.
      Title to and risk of loss for all Product supplied to SyntheMed hereunder shall
      pass from
      STI to
      SyntheMed upon acceptance of the shipment by the carrier at the distributors
      or
      customers facility. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.6
      Invoices. STI shall invoice SyntheMed for the aggregate Product which it
      manufactures, upon shipment to SyntheMed, and SyntheMed shall pay each invoice
      within *** All payments shall be in United States currency. 

    

    5.7
      Tax
      Withholding. If SyntheMed in good faith concludes that tax withholdings under
      the laws of any country are required with respect to payments to STI, it shall
      withhold the required amount and pay it to the appropriate Governmental
      Authority, and shall promptly provide STI with original receipts or other
      evidence reasonably required and sufficient to allow STI to document such tax
      withholdings adequately for purposes of claiming foreign tax credits and similar
      benefits.

      

    6.
      QUALITY CONTROL AND REGULATORY COMPLIANCE

    

    6.1
      No
      Product shall be released for shipment by STI unless and until SyntheMed shall
      have been notified by STI of completion of Product manufacture and SyntheMed
      has
      reviewed and approved the testing results. SyntheMed will be afforded full
      opportunity to test the Product to ensure compliance with the Product
      Specifications and to confirm the results submitted to SyntheMed by STI. Such
      testing may be accomplished either by SyntheMed directly or by a third party
      designated by SyntheMed, which designee may be an independent testing
      laboratory. Each
      lot
      of Product manufactured by STI shall have STI's Certificate of Conformance
      and
      Certificate of Analysis, the generic form of which is attached as Schedule
      4.

    

    6.2
      SyntheMed or its designee shall be entitled to reject any shipment of Product
      or
      portion thereof that is not manufactured and/or delivered in accordance with
      the
      terms of this Agreement. SyntheMed shall notify STI of the existence and nature
      of any non-compliance or defect
      relating
      to the assembly and packaging in writing, accompanied by representative samples,
      ***
      after
      receipt of the assembled or packaged product from STI and
      STI
      shall have a reasonable opportunity, not to exceed five (5) business days from
      receipt of such notification or of receipt of the defective product if
      applicable, to inspect such defective material and/or Product. SyntheMed shall
      have no obligation to pay for any Product that is subject to such a claim of
      non-compliance or defect. If STI fails to timely inspect or if such inspection
      confirms such non-compliance or defect, STI shall promptly replace such
      non-compliant or defective Product at its own cost and expense.

    

    6.3
      If,
      after STI’s inspections of such Product, the parties disagree as to the
      Product’s conformance to the Specifications or whether the Product has such a
      defect, either party may deliver the Product to an independent third-party
      laboratory, mutually and reasonably acceptable to both parties, for analytical
      testing to confirm the Product’s conformance to the Product Specifications or
      the presence or absence of defects. All costs associated with such third-party
      testing shall be at STI’s expense unless the independent Party review concludes
      the product conformed to specifications No inspection or testing of or payment
      for Product by SyntheMed or any third-party agent of SyntheMed shall constitute
      acceptance by SyntheMed thereof, nor shall any such inspection or testing be
      in
      lieu or substitution of any obligation of STI for testing, inspection and
      quality control as provided in the Specifications or under applicable local,
      state, or federal laws, rules, regulations, standards, codes or
      statutes.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    6.4
      In
      the event of an audit by a Regulatory Authority at SyntheMed which involves
      any
      Commercial Product, SyntheMed shall notify STI of such audit promptly after
      receiving notice thereof. Pursuant to such notice of audit, STI shall supply
      SyntheMed with quality control documents related to the Product portion of
      the
      Commercial Product, within one business day from a request by
      SyntheMed.

    

    6.5
      STI
      shall promptly notify SyntheMed whenever a request for a plant inspection is
      received from the FDA or other Regulatory Authority that relates in any way
      to
      Product or Commercial Product, and shall promptly advise SyntheMed of any
      scheduled or unscheduled Product or Commercial Product related FDA or other
      Regulatory Authority inspection and the progress and results thereof. A copy
      of
      Form 483 observations or other applicable reports, which apply to Product or
      Commercial Product, shall be supplied to SyntheMed within one business day
      of
      receipt. STI, at STI's sole expense, shall promptly take steps to remedy any
      valid deficiencies found by the FDA or other Regulatory Authority inspectors
      relating to the manufacture of Product, and to respond promptly in writing
      to
      the Form 483 observations. STI shall provide SyntheMed with a copy of its
      responses to any Form 483 observations relating to the Products or Commercial
      Products in advance of their submission to FDA. SyntheMed shall have the right
      to review and approve any responses that directly relate to the manufacture
      of
      its product prior to their submission to FDA. STI shall notify SyntheMed of
      the
      date the mutually approved responses are filed with the FDA.

    

    6.6
      STI
      shall not conduct a voluntary recall of Commercial Product without prior full
      consultation with SyntheMed regarding the ramifications, costs and regulatory
      strategies associated with such a recall. 

    

    6.7
      SyntheMed and STI shall assist and cooperate with each other in giving effect
      to
      any "Recall," as that term is defined in 21 CFR 810.2. STI shall be responsible
      for the manufacturing cost of Commercial Product and Product replacements as
      per
      this agreement of any Recall caused by STI's shipment of Products that did
      not
      meet Product Specifications and the costs associated with return and reshipment
      including, without limitation, any direct costs associated with the shipment
      and
      reshipment and replacement of such Commercial Products and Products. STI shall
      have no other obligations with respect to such Recalls, except as may be
      provided for in Section 15.1. SyntheMed shall, however, bear all costs and
      expenses of any recall caused by Commercial Product design, or other acts not
      attributable to STI causing a Recall to occur, including, without limitation,
      costs of notifying customers and costs associated with the shipment and
      reshipment and replacement of such Commercial Products.
      For
      purposes of clarification, STI is not responsible for any costs associated
      with
      loss of sales.

    

    6.8
      STI
      shall provide SyntheMed (or its third party designee) access to its sites and
      quality system records for the purpose of auditing and reviewing the sites
      for
      compliance with STI’s obligations under this Agreement (the "Review"). Any
      information obtained by SyntheMed as a result of such Review shall be subject
      to
      the provisions of Article 9 hereof. Such Review shall be made during regular
      business hours, upon reasonable notice and at reasonable intervals. STI shall
      respond to any findings under such Review in writing within thirty (30) days,
      unless otherwise agreed; additionally, SyntheMed shall have the right to
      re-Review any specific records to establish that any findings have been
      corrected.

    

    6.9
      STI
      shall cooperate with SyntheMed to provide any authorizations, documents,
      information, testing protocols and procedures in STI's possession subject to
      Section 3, or take such other actions, which SyntheMed may reasonably request
      in
      order to obtain or maintain any registration, approval, clearance, certification
      or other authorization with or from any federal, state, local or foreign
      government agency or any self-regulatory body. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.10
      Each
      party shall keep and maintain complete and accurate records necessary for
      regulatory compliance for a period of at least five years (5) years after the
      product has been released for commercial distribution. 

    

    6.11
      The
      signed SyntheMed Quality Agreement (schedule 6) will be reviewed and updated
      as
      required per any applicable regulatory requirement changes. 

    

    6.12
      All
      documents specifically related to the manufacturing and distribution of
      Synthemed product (i.e. batch records, manufacturing procedures, FDA/ISO
      required documentation) will be the property of Synthemed and will be provided
      if and when requested. 

    

    7.
      INTELLECTUAL PROPERTY RIGHTS

    

    7.1
      STI
      and SyntheMed acknowledge the exclusive right, title, interest and goodwill
      in
      and to each trademark, trade name or other Intellectual Property right owned
      by
      the other party. Neither STI nor SyntheMed will, at any time or in any way,
      do
      or cause to be done any act, or omission, or thing to challenge, contest or
      in
      any way impair the right, title, and interest of the other party. Except as
      otherwise provided in this Agreement, STI and SyntheMed shall not in any manner
      represent that either has any rights in or to any trademark, trade name or
      other
      Intellectual Property right of the other party and each acknowledges that the
      permitted use of any trademark, trade name or other Intellectual Property right
      of the other shall not create any ownership right, title, or interest in or
      to
      any trademark, trade name or other Intellectual Property right of the other
      party.

    

    8.
      CONFIDENTIAL INFORMATION

    

    8.1
      The
      parties agree:

    

    a.
      To
      receive and hold all Confidential Information in strict confidence and to
      disclose such Confidential Information only to its employees and representatives
      who have a need to know the Confidential Information. Without affecting the
      generality of the foregoing, the Receiving Party will exercise no less care
      to
      safeguard the Confidential Information than it exercises in safeguarding its
      own
      Confidential Information and will be responsible for any breach of the
      provisions of Article 9 by its employees and representatives (including its
      employees who, subsequent to the first disclosure of Confidential Information,
      become former employees);

    

    b.
      That
      the Receiving Party shall not, directly or indirectly, disclose or use the
      Confidential Information, in whole or in part, for any purposes other than
      those
      contemplated herein. Without affecting the generality of the foregoing, the
      Receiving Party shall not, directly or indirectly, disclose any such
      Confidential Information to any third party or use the Confidential Information
      for the benefit of any third party;

    

    c.
      That
      neither party shall, without the prior written consent of the other party,
      disclose to any third party Confidential Information and or any of the terms,
      conditions or other facts with respect to the business relationship of the
      parties. Any approved disclosure made shall be no more extensive than is
      necessary to meet the minimum requirement imposed on the party making such
      disclosure; it being understood that STI consents to such public disclosure
      regarding the business relationship of the parties as SyntheMed or its counsel
      deems necessary or appropriate to comply with applicable law;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

      

    d.
      That
      money damages may not be a sufficient remedy for a breach of this Article 8
      and
      that the non-breaching party may be entitled to equitable relief (including,
      but
      not limited to, a temporary restraining order or an injunction or specific
      performance), without posting bond or establishing monetary damages, in the
      event of any breach of the provisions of this Article 8; 

    

    e.
      The
      furnishing of Confidential Information hereunder shall not constitute or be
      construed as a grant of any express or implied license or other right, or a
      covenant not to sue or forbearance from any other right of action by the
      Disclosing Party to the Receiving Party under any of the Disclosing Party's
      patents or other Intellectual Property rights;

    

    f.
      Upon
      the Disclosing Party's request at any time, or upon termination or expiration
      of
      this Agreement, the Receiving Party shall immediately return or destroy all
      written, graphic and other tangible forms of the Confidential Information (and
      all copies thereof) in the Receiving Party's possession or control except for
      one copy which may be retained by the party's legal counsel for legal archival
      purposes only; and

    

    g.
      The
      obligations of the Receiving Party regarding disclosure and use of Confidential
      Information shall survive the termination of this Agreement and shall continue
      for five (5) years after the date of termination of this Agreement.

    

    9.
      PUBLICITY

    

    9.1
      During the Term and thereafter, except as required by applicable law, neither
      party shall, without securing the prior written consent of the other party,
      release the terms of this Agreement to any third party or publicly announce
      the
      terms of this Agreement. Notwithstanding the foregoing, during the Term and
      thereafter, SyntheMed may, in addition to the disclosure permitted under Section
      8.1 above, disclose the existence and general nature of this Agreement in press
      releases, shareholder reports, quarterly and annual corporate reports,
      Securities and Exchange Commission filings and public or private equity
      offerings. In addition, SyntheMed may provide a copy of this Agreement as part
      of a due diligence review in connection with a merger, an acquisition, or a
      public or private equity offering, so long as such review is under the auspices
      of an appropriate confidentiality agreement. 

    

    10.
      WARRANTIES AND REPRESENTATIONS

    

    10.1
      Subject to the provisions set forth in this Section 10.1 and Section 10.4,
      STI
      warrants: (i) that all Product delivered hereunder shall conform in all material
      respects to Product Specifications at the time of shipment; (ii) that all
      Product shall be manufactured substantially in accordance with (a) QSR, (b)
      the
      pertinent rules and regulations of the FDA and (c) the EU Medical Device
      Directive; and (iii) that no Product delivered hereunder shall at time of
      shipment be adulterated or misbranded within the meaning of the Act, or within
      the meaning of any applicable state or municipal law in which the definitions
      of
      adulteration and misbranding are substantially the same as those contained
      in
      the Act, provided such laws are constituted and effective at the time of such
      delivery (collectively, the "Product Warranties"). These Product Warranties
      shall be null and void and shall not apply to any Product which is in any way
      altered, modified, damaged or replaced by any person other than STI or its
      agents or which is abused or misused, whether intentionally or
      accidentally.

    

    STI
      services are generally limited to the assembly, packaging and sterilization
      of
      Repel CV. If other services are provided by Seller, the warranty, if any, for
      such services will be as separately negotiated and agreed to in writing by
      Seller and the Buyer.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Sterilization.
      STI
      warrants that its sterilization services shall be conducted by certified
      facilities to meet or exceed industry sterilization standards and that
      production load release testing will meet the specifications Any claim relating
      to sterilization must be submitted to STI in writing, accompanied by
      representative samples, within sixty (60) days after receipt of the sterilized
      product from STI or promptly following rejection of a lot due to sterility
      failure.

    

    Upon
      confirmation by STI of a warranty breach, STI will authorize the return of
      the
      defective products. Products claimed to be defective are not to be returned
      without such prior STI written approval. 

    

    Exclusive
      Remedy.
      For
      defective product, the exclusive remedy shall be for STI to, at its option,
      repair the defective product, replace the defective product or issue credit
      for
      the defective product.

    

    10.2
      Each
      party represents and warrants that it is and will remain in material compliance
      with all applicable federal, state and local laws, regulations and orders as
      they may apply to this Agreement.

    

    10.3
      STI
      and SyntheMed each represent and warrant for itself that (i) it is duly
      incorporated and validly existing and in good standing under the laws of the
      state of its incorporation, (ii) it has the full right, power, and authority
      to
      execute and perform this Agreement, (iii) this Agreement does not conflict
      with
      or otherwise result in a breach of any agreement to which such party is a party
      or to which it is bound, and (iv) this Agreement represents a valid, legally
      binding obligation of it, enforceable against it in accordance with its
      terms.

    

    10.4
      EXCEPT AS OTHERWISE EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT, NEITHER
      PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL
      OR SPECIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS
      AGREEMENT.

    

    11.
      ASSIGNMENT

    

    11.1
      Neither party may assign or transfer this Agreement, in whole or in part, to
      a
      third party without the prior written consent of the other party, which consent
      shall not be unreasonably withheld, conditioned or delayed.
      Notwithstanding the foregoing, SyntheMed may assign this Agreement to any of
      its
      affiliates, or in connection with the sale of that part of its business relating
      to the Commercial Products provided that in no event shall any such assignment
      release SyntheMed from its responsibilities under this Agreement unless the
      assignee has agreed in writing to assume all the obligations of SyntheMed
      hereunder 

    

    11.2
      This
      Agreement will bind and inure to the benefit of the respective successors and
      permitted assigns, whether so expressed or not.

    

    12.
      INSURANCE

    

    12.1
      STI
      and SyntheMed shall each obtain and maintain at all times during the Term
      following the first Purchase Order hereunder, product liability insurance in
      the
      amount of at *** per occurrence and *** and shall deliver to the other party
      a
      certificate evidencing such insurance.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.
      TERMINATION 

    

    13.1
      In
      addition to any other rights of termination granted to the parties in this
      Agreement, each party shall have the right, but not the obligation, to terminate
      this Agreement upon notice to the other party under the following
      circumstances:

    

    i.  for
      no
      reason, upon six (6) months’ prior notice to the other party; 

    

    ii.
      if
      the other party declares bankruptcy, makes an assignment for the benefit of
      its
      creditors, if any proceedings take place for arrangement for the appointment
      of
      a receiver or trustee to take possession of such party's assets, or any other
      proceeding under law for the entry of an order for the relief of creditors
      of
      such party shall be instituted the other party which shall not have been
      vacated, discharged, stayed, satisfied or bonded pending appeal within
      forty-five (45) days from the entry thereof or if such party shall become
      insolvent; or

    

    iii.
      upon
      a material breach of this Agreement by the other party, which breach is not
      remedied or cured within sixty (60) days’ notice thereof by the terminating
      party.

    

    13.2
      Upon
      termination or expiration of this Agreement for any reason, including the end
      of
      the Term as defined in Section 2, nothing herein shall be construed to release
      either party from any obligation, which matured prior to the effective date
      of
      termination, or which by their terms are intended to continue.

    

    14.
      INDEMNIFICATION

    

    14.1
      STI
      agrees to indemnify, defend and hold SyntheMed and any of its officers,
      directors, affiliates, employees, sales agents, successors and permitted assigns
      (each, an "SyntheMed Indemnified Party") harmless from and against any and
      all
      Claims of third parties for any Losses arising out of or resulting from: (i)
      the
      failure of STI to ship Product that meets the Product Specifications or that
      is
      not manufactured in compliance with QSR or other applicable laws and
      regulations; (ii) any STI breach of a representation, warranty, covenant or
      obligation in this Agreement; or (iii) any negligence or willful misconduct
      of
      STI or its representatives, directors, officers, employees and agents, in
      connection with the activities contemplated under this Agreement, in each case,
      only to the extent such Claims listed in Section 14.1 (i - iv) are not (a)
      due
      to the negligence or willful misconduct of a SyntheMed Indemnified Party, or
      (b)
      otherwise subject to indemnification under Section 14.2.

    

    14.2
      SyntheMed agrees to indemnify, defend and hold STI and any of its officers,
      directors, affiliates, employees, sales agents, successors and permitted assigns
      (each, a "STI Indemnified Party") harmless from and against any and all Claims
      of third parties for any Losses arising out of or resulting from: (i) any
      SyntheMed breach of a representation, warranty, covenant or obligation in this
      Agreement; (ii) any personal injury or death resulting from use of the
      Commercial Product by end-users; or (iii) any negligence or willful misconduct
      of SyntheMed or its representatives, directors, officers, employees and agents,
      in connection with the activities contemplated under this Agreement.; in each
      case, only to the extent such Claims listed in Section 14.2 (i - iii) are not
      (a) due to the negligence or willful misconduct of a STI Indemnified Party,
      or
      (b) otherwise subject to indemnification under Section 14.1.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    14.3
      To
      receive the indemnities contained in this Section 14, the party entitled to
      indemnification hereunder (the "Indemnified Party") must provide the party
      obligated to provide indemnification hereunder (the "Indemnifying Party") with
      (i) reasonably prompt notice in writing of any such Claim or action, (ii)
      information and reasonable assistance, at the Indemnifying Party's expense,
      as
      necessary or appropriate to defend or settle such Claim or action, and (iii)
      full authority to defend or settle the Claim or suit. The Indemnified Party
      shall have the right to employ separate counsel and participate in the defense
      of any Claim or action, at its own expense. Except as provided in the last
      sentence of this Section 14.3, the Indemnified Party may not settle any Claim
      or
      action under this Section 14 on behalf of the Indemnifying Party without first
      obtaining the Indemnifying Party's written permission, and so long as the
      Indemnifying Party is diligently conducting a defense as provided herein, it
      shall not be liable for the attorneys' fees or expenses of the Indemnified
      Party. If an Indemnified Party provides notice of a Claim that is subject to
      indemnification in accordance herewith and is not notified within ten (10)
      days
      that the Indemnifying Party intends to defend such Claim, the Indemnified Party
      shall be entitled to defend, settle and/or compromise such Claim, subject to
      the
      indemnification provided for herein. Nothing in this provision, however, shall
      permit either party to enter into a settlement that imposes an obligation on
      the
      other party requiring them to take any affirmative action or refrain from any
      act, unless such other party consents to such settlement.

    

    15.
      MISCELLANEOUS 

    

    15.1
      Independent Contractor. Neither party shall have the right, power or authority
      to assume or create any obligations or responsibility expressed or implied,
      on
      behalf of, or in the name of, the other party, or to bind the other party in
      any
      manner or to any extent whatsoever, without the prior written approval and
      acceptance of the other party. Each of the parties hereto is an independent
      contractor for the purposes of this Agreement and nothing contained herein
      shall
      be deemed or construed to create the relationship of agency, partnership or
      joint venture or any other association except that of an independent contractor
      relationship. Neither
      Seller nor Buyer shall be liable for any delay or failure in the performance
      of
      this Proposal resulting from any cause beyond the reasonable control of the
      respective parties, including labor strikes, fire, floods, riots, acts of
      government and regulatory agencies or Acts of God.

    

    15.2
      Amendment and Waiver. This Agreement may be amended, and any provision of this
      Agreement may be waived, provided that any such amendment or waiver will be
      binding on each party only if such amendment or waiver is set forth in a writing
      executed by such parties. Waiver of a breach of the Agreement shall not
      constitute a waiver of any other subsequent breach of the Agreement. The waiver
      of any provision of this Agreement shall not constitute a continuing waiver
      of
      that provision or a waiver of any other provision of this
      Agreement.

    

    15.3
      Notices. All notices, demands and other communications to be given or delivered
      under or by reason of the provisions of this Agreement shall be in writing
      and
      shall be deemed to have been given when sent by facsimile transmission with
      acknowledged returned receipt, personally delivered or mailed by overnight
      mail,
      return receipt requested. Notices demands and communications shall, unless
      another address or individual is specified in writing, be sent to the addresses
      set forth as follows:

    

     
      If to
      SyntheMed:    SyntheMed, Inc.

                200
      Middlesex Essex
      Turnpike, Suite 210

                Iselin
      NJ
      08830

                Attention:
      President

    

     
      If to
      STI:                 
STI, Inc.

                292
      East Lafayette
      Frontage Road,

                Saint
      Paul, Minnesota
      55107

                Attention:
      Vice
      President, General Manager 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

      

    15.4
      Severability. Whenever possible, each provision of this Agreement will be
      interpreted in such a manner as to be effective and valid under applicable
      law,
      but if any provision of this Agreement is held to be prohibited by or invalid
      under applicable law, such provision will be ineffective only to the extent
      of
      such prohibition or invalidity, without invalidating the remainder of such
      provision or the remaining provisions of this Agreement.

    

    15.5
      Complete Agreement. This Agreement and the documents referred to herein contain
      the complete agreement between the parties and supersede all prior
      understandings, agreements and representations by or between the parties,
      written or oral, which may have related to the subject matter hereof in any
      way.

    

    15.6
      Counterparts. This Agreement may be executed in one or more counterparts all
      of
      which taken together will constitute one and the same instrument.

    

    15.7
      Governing Law. The law of the State of New Jersey will govern, without regard
      to
      the conflicts of law provisions thereof, all questions concerning the
      construction, validity and interpretation of this Agreement and the performance
      of the obligations imposed by this Agreement.

    

    15.8
      Headings. Section headings used in this Agreement are for convenience only
      and
      form no part or in any way modify or define the text of meaning or any provision
      of this Agreement.

    

    15.9
      Force Majeure. In
      the
      event that any party is prevented from performing, or is unable to perform,
      any
      of its obligations under this Agreement due to any
      act
      of God,
      fire, casualty, flood, war, strike, lock out, failure of public utilities,
      injunction or any act, exercise, assertion or requirement of governmental
      authority, epidemic, destruction of production facilities, any act of declared
      or undeclared war or of a public enemy, or any riot or insurrection, any
      nuclear, biological, chemical or similar attack, any act of terrorism,
or
      any
      similar occurrence cause outside the reasonable control of that party,
and
      if
      such party shall have used its best efforts to avoid such occurrence and
      minimize its duration and has given prompt written notice to the other party,
      then the affected party's performance shall be excused and the time for
      performance shall except as otherwise provided for in this Agreement, be
      extended for the period of delay or inability to perform due to such
      occurrence.

    

    15.10
      Equipment 

    STI
      is
      responsible for maintaining SyntheMed’s equipment and will, if requested by
      SyntheMed, deliver such equipment to Synthemed at SyntheMed’s expense at the end
      of the Term or permit Synthemed to remove the equipment. STI will provide
      technical and other assistance necessary to effectively transfer packaging
      operations to a third party, the reasonable cost of which will be borne by
      SyntheMed. The scope of STI’s maintenance obligations will be discussed and
      mutually agreed upon by SyntheMed; provided Synthemed shall bear the cost of
      repair and replacement of broken parts and equipment, provided that the same
      shall not have resulted from STI’s negligence or otherwise from STI’s breach of
      its obligations herein. The Equipment covered in this section is defined in
      Schedule 7.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    15.11
      Remedies. Unless otherwise expressly stated, any remedy expressly provided
      for
      herein shall not be deemed to be a limitation on any remedy for any such
      situation or occurrence.

    

     
      IN
      WITNESS WHEREOF, the parties have executed this Agreement through
      their

    duly
      authorized representatives as of the date first written above.

     

     

    
      
        	
                SYNTHEMED,
                  INC.

              	
                STI,
                  INC.

              
	 	 
	 	 
	
                By:
                  /s/ Robert P. Hickey

              	
                By:
                  [Illegible Signature]

              
	
                Signature

              	
                Signature

              
	 	 
	
                Robert
                  P. Hickey

              	
                /s/
                  Kenneth R. Blake

              
	
                Name

              	
                Name

              
	 	 
	
                President
                  & CEO

              	
                Vice
                  President General Manager

              
	
                Title

              	
                Title

              
	 	 
	
                3/9/07

              	
                March
                  23, 2007

              
	
                Date

              	
                Date

              

      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    List
      of
      Schedules

    

    
      	1.  	
              Large
                Dry Component Film Roll
                specification

            

    

    
      	2.  	
              REPEL-CV
                Product Specifications

            

    

    
      	3.  	
              STI
                Product Proposal to include

            

    

    
      	a.  	
              STI
                Finished Product Transfer Price

            

    

    
      	b.  	
              Delivery
                schedule/requirements

            

    

    
      	c.  	
              Additional
                Charges

            

    

    
      	d.  	
              Definition
                of Responsibilities

            

    

    
      	4.  	
              Finished
                Product Certificate of Conformance/Analysis
                (example)

            

    

    
      	5.  	
              SyntheMed
                Product Forecast (SEE EXHIBIT B OF SCHEDULE
                3)

            

    

    
      	6.  	
              SyntheMed
                Quality Agreement

            

    

    
      	7.  	
              List
                of Synthemed Owned Equipment

            

    

    
      	8.  	
              STI
                Logistics Proposal

            

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    SCHEDULE
      1

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	 	
              Material
                Specification

            	 

    

    

    1.
       DESCRIPTION

    Material:
      ***

    
 

    2.  MATERIAL
      VENDORS 

    Chem
      Development Inc. (CDI) -produces the material

    Surgical
      Technologies, Inc. (STI) - receives material for further processing

    

    3. SPECIFICATION
      

    

    The
      following is the criteria used in order to demonstrate that each lot of the
      large dry component film roll meets its design characteristics prior to being
      released for further processing. Each criterion is tested on a lot by lot basis
      at CDI. The results are reviewed and approved by Synthemed and if acceptable,
      the material is released for further processing. At receiving inspection, the
      product will be tested or accepted via a vendor certification. The method of
      acceptance at receiving will be documented and agreed upon in advance by
      SyntheMed, Inc.

     

    
      	3.1  	
              ***

            

    

     

    
      	3.2  	
              ***

            

    

     

    
      	3.3  	
              ***

            

    

     

    
      	3.4  	
              ***

            

    

     

    
      	3.5  	
              ***

            

    

    4.
       RESPONSIBILITIES
      

    

    
      	 	
              4.1

            	
              CDI
                is responsible for the manufacturing of the material. CDI will be
                responsible for assuring the material meets all the specified criteria
                as
                defined in section 3.

            

      	 	4.2	STI is responsible for the receipt, inspection and
              release of material

    

      

    5. RECEIVING/STORAGE

     

    
      	 	
              5.1
                

            	
              STI
                is responsible for the receipt and storage of material. These activities
                will be performed in accordance with documented procedures which
                are
                compliant with all applicable regulatory requirements. SyntheMed
                will
                evaluate these procedures as part of its vendor qualification and
                monitoring procedures.

            

    

    

    6. INSPECTION
      

    

    
      	6.1  	
              CDI
                is responsible for the inspection of the material prior to release
                for
                further distribution. These activities will be performed in accordance
                with documented procedures which are compliant with all applicable
                regulatory requirements. SyntheMed will evaluate these procedures
                as part
                of its vendor qualification and monitoring
                procedures.

            

    

    

    
      	6.2  	
              STI
                is responsible for the inspection of the incoming material. These
                activities will be performed in accordance with documented procedures
                which are compliant with all applicable regulatory requirements.
                SyntheMed
                will evaluate these procedures as part of its vendor qualification
                and
                monitoring procedures

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    SCHEDULE
      2

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
              Final
                Product Specification

            	 

    

    

     

    1.  FINAL
      PRODUCT RELEASE CRITERIA

     

    The
      following is the criteria used in order to demonstrate that each lot of REPEL-CV
      meets its design characteristics prior to being released for commercial
      distribution. Each criterion is either tested on a lot by lot basis or the
      process has been validated to assure the criterion has been met.

     

    ***

     

    These
      tests are not performed on every lot produced. Their acceptability is based
      on
      successful process validation results and appropriate process testing and
      controls. 

    

    ***

     

    2.0
       PROCEDURE

     

    2.1 The
      approved facilities that will perform each test are listed in Section 3. Reports
      from all the testing will be compiled by STI Quality Assurance..

     

    2.2
      The
      results are entered on the REPEL -CV Lot Test Record and the reports are
      attached. These are placed in or referenced in the DHR for the lot.

     

    2.3
      All
      the final results are reviewed and approved by the Quality Assurance departments
      of STI and SyntheMed

     

     

    3.0  PRODUCT
      TESTING

     

    ***

     

    4.0
      APPROVED CONTRACT TESTING VENDORS

    

    ***

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

     

    SCHEDULE
      3

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Schedule
      3

    Proposal
      No. 7020 Rev. 3

    February
      1, 2007

    

    Surgical
      Technologies, Inc. (“Seller”), is pleased to present to SyntheMed (“Buyer”) a
      revised proposal for the procurement of components, packaging and EtO
      sterilization of your Repel-CV. Upon execution by both parties, this Proposal
      (as set forth in items 1 through 7 hereof, the “Proposal”), together with the
      attached Standard Terms and Conditions, shall become a binding agreement
      enforceable against the parties in accordance with its terms. 

    

    Your
      proposal is broken down as follows:

    1.0 FINANCIAL/DELIVERY

    

    
      
        1.1  
          Long
          Term Purchase Order

      

    

    Based
      on
      issuance of a purchase order which specifies delivery dates and
      quantities:

    

    ***

    Subsequent
      Deliveries:
      as
      scheduled 

    

    Note:
       Buyer
      and
      Seller will develop a procedure under which Buyer will provide long-term
      forecasts on a rolling periodic basis and for orders to become binding (see
      Exhibit B). Seller commits to providing Buyer forecasted capacity needs on
      a
      timely basis. Buyer would have first priority use of the clean/dry room. Seller
      will consult with and obtain Buyer’s approval (which approval shall not be
      unreasonably withheld, conditioned or delayed) prior to conducting activities
      using equipment owned by Buyer, which could interfere with the activities being
      performed for Buyer.

    

    ***

    2.0 MATERIALS
      SUPPLIED BY BUYER

    
      	 	
              a.

            	
              All
                materials must be clean, ready to be packaged, properly identified,
                correctly counted and listed on a packing slip. (Note: Parts must
                be
                particulate free and suitable for clean room
                processing.)

            

    

    

    Materials
      Provided: REPEL CV

    

    ***

    3.0 MATERIALS
      SUPPLIED AND MANAGED BY SELLER

    ***

    

    
      
        4.0
          ASSEMBLY
          AND PACKAGING PROCESSES PERFORMED BY SELLER

      

    

    ***

    5.0
       EtO
      STERILIZATION PREPARATION

    ***

    6.0 EtO
      STERILIZATION

    ***

    7.0 POST
      STERILIZATION QUARANTINE

    ***

    8.0 STERILITY
      TESTING COSTS

    ***

     

    .1  Exhibit
      A

    SURGICAL
      TECHNOLOGIES, INC. WARRANTY

    

    
      	
              1.

            	
              Scope
                of Warranty. Seller
                services are generally limited to the assembly, packaging and
                sterilization of medical devices. If other services are provided
                by
                Seller, the warranty, if any, for such services will be as separately
                negotiated and agreed to in writing by Seller and the
                Buyer.

            

    

    

    2. Limited
      Warranty.

    
      	 	
              A.

            	
              Assembly
                and Packaging.
                Seller warrants that its assembly and packaging services shall be
                free
                from defects in material and workmanship to the level specified by
                the
                Buyer as set forth on Exhibit C. Any claim relating to this assembly
                and
                packaging warranty must be submitted to Seller in writing, accompanied
                by
                representative samples, within sixty (60) days after receipt of the
                assembled or packaged product from
                Seller.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
              B.

            	
              Sterilization.
                Seller warrants that its sterilization services shall be conducted
                by
                certified facilities to meet or exceed industry sterilization standards
                and that production load release testing will meet the specifications
                set
                forth on Exhibit C. Any claim relating to this sterilization warranty
                must
                be submitted to Seller in writing, accompanied by representative
                samples,
                within sixty (60) days after receipt of the sterilized product from
                Seller
                or promptly following rejection of a lot due to sterility
                failure.

            

    

    

    
      	 	
              C.

            	
              Procedure.
                The written claim, together with representative samples, shall be
                sent to
                the involved Seller facility:

            

    

    

      
        	
                Surgical
                  Technologies, Inc.

              	
                Scanlan
                  Group B.V. 

              
	
                292
                  E. Lafayette Frontage Road

              	
                Postbus
                  75664

              
	
                St.
                  Paul, MN 55107

              	
                1118
                  ZS SchipholTriport

              
	Attn: Joseph
                F.
                Scanlan	
                The
                  Netherlands

              
	
              	
                Attn:
                  Julie Reilly 

              

      

    

     

    Upon
      confirmation by Seller of a warranty breach, Seller will authorize the return
      of
      the defective products. Products claimed to be defective are not to be returned
      without such prior Seller written approval. The remedy for defective product
      shall be as provided below.

    

    
      	
              3.

            	
              Exclusive
                Remedy.
                For defective product, the exclusive remedy shall be for Seller to,
                at its
                option, repair the defective product, replace the defective product
                or
                issue credit for the defective
                product.

            

    

    

    
      	4.  	
              Disclaimer. Except
                as expressly provided herein, Seller makes no warranty of any kind,
                express or implied, including, but not limited to, the implied warranties
                of merchantability and fitness for a particular purpose. The above
                warranties are in lieu of all other warranties, and no person (including
                any agent, dealer or representative of Seller) is authorized to make
                any
                representation or warranty concerning the Seller services except
                to refer
                Buyers to this warranty. Seller shall not be responsible for the
                cost of
                labor or other charges of any kind incurred outside its facilities
                (except
                for costs related to sterilization or other activities to be performed
                under the Agreement on behalf of the Seller). Seller shall under
                no
                circumstances be liable with respect to defective product for special,
                incidental, consequential or exemplary damages of any nature whatsoever,
                however occasioned (whether by negligence or otherwise), including,
                but
                not limited to, commercial loss from any cause, business interruption
                of
                any nature, loss of profits or personal injury, even if Seller shall
                have
                been advised of the possibility of such
                damages.

            

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    Exhibit
      B

    Long-Term
      Forecasts

    

    ***

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Exhibit
      C

    Release
      Criteria

    

    The
      following is the criteria used to demonstrate that each lot of REPEL-CV meets
      its design characteristics prior to being released for commercial
      distribution.  Each criterion is either tested on a lot by lot basis or the
      process has been validated to assure the criterion has been met.

    

    *** 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    

    SCHEDULE
      4

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    This
      document certifies that Surgical Technologies, Inc. has properly completed
      and
      documented all the contracted manufacturing, packaging, testing, and
      sterilization activities specified by the customer for the following product(s):
      These activities were done in compliance to the applicable sections of: FDA
      QSR;
      ISO 13485:2003; EN 550, 552, & 556; and ANSI/AAMI/ISO 11135 & 11137. The
      following release testing was performed on the specified product:

    

    
      	
              2  Mfg
                Lot:

            	
              3  Sterile
                Lot:

            	
              4  Release
                Qty:

            
	
              Test

            	
              Pass/Fail
                Criteria

            	
              Tested
                by/ Method

            	
              5  Test
                Result

            
	
              ***

            	
              ***

            	
              ***

            	
              ***

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
               

            

    

    

    
      	
              STI
                QA Approved by:

            	 	
              Date:

            	 
	
              SyntheMed
                QA Released

            	 	
              Date:

            	 

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    

    SCHEDULE
      6

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SYNTHEMED
      QUALITY AGREEMENT

    

    

    This
      Quality Agreement (the "Agreement") is made as of November 10, 2006 between
      SyntheMed, Inc. and STI with its principal office at 292 East Lafayette Frontage
      Road, Saint Paul, Minnesota 55107.

    

    Purpose
      

    The
      purpose of this Agreement is to set forth the quality arrangements for ensuring
      that the manufacture, packaging, quality control and release of REPEL-CV (the
      "Agreement Product") shall take place in accordance with applicable sections
      of
      the Quality System Regulations (Good Manufacturing Practice) as detailed in
      Title 21, Code of Federal Regulations, Part 820, US Food and Drug
      Administration, or the requirements of the European Medical Device Directives
      and ISO 13485. 

    

    Responsibilities
      

    

    1.
       Audits 

    

    STI
      shall
      give all reasonable access to its facilities to satisfy all applicable
      regulatory audit requirements. Any such audits will determine if STI has
      adequate premises, equipment, systems and a staff with sufficient knowledge
      and
      training to carry out satisfactorily the manufacture, assembly, packaging and
      testing of the Agreement Product. 

    

    2.
       Material
      Specifications

    

    STI
      shall
      manufacture the Agreement Product according to the methods agreed to by
      SyntheMed. The information/specifications to be provided to STI may include
      but
      may not be limited to: 

    The
      manufacturing formula 

    The
      manufacturing method

    The
      environmental conditions required 

    The
      master batch manufacturing record 

    The
      finished product specification 

    All
      analytical methods 

     

    3.
       Change
      control 

    

    STI
      shall
      not, except with the prior written consent of SyntheMed (which consent shall
      not
      be unreasonably withheld or delayed), change or cause to be changed any
      materials, equipment, or method of production or testing related to the
      Agreement Product provided however, that any such change for which SyntheMed
      has
      given its prior written consent shall also comply in all respects with all
      applicable legal requirements, and provided further, that in the event any
      change is required by any legal requirement and SyntheMed does not consent
      to
      such change within a reasonable period of time, STI shall be excused from all
      performance hereunder. 

    

    4.
       Documentation
      

    STI
      will
      create the documentation to produce the Agreement Product to satisfy the
      appropriate regulatory requirements. These documents will be reviewed and
      approved by SyntheMed. They will be subject to Change Control as specified
      in
      section 3 above. STI will provide control of all documentation as required
      under
      all applicable regulations and as part of the STI quality system. 

    

    5.
       Incoming
      Material Testing 

    With
      the
      exception of customer supplied materials STI
      shall
      be responsible for the assessment of all incoming material to be used in the
      manufacture of the Agreement Product in order to ensure compliance with the
      agreed upon specifications. STI will be responsible for the approval of all
      vendors of the materials other than the supplier of the Raw Material Film from
      ChemDevelopment.

    

    6.
       In-Process
      Controls 

    STI
      shall
      be responsible for any agreed upon quality control testing required during
      the
      manufacture of the Agreement Product. STI shall advise SyntheMed of any
      significant changes prior to their implementation in the in-process controls
      (ref section 3 above). 

    

    7.
       Finished
      Product Testing 

    STI
      shall
      be responsible for testing each batch of the Agreement Product (including any
      testing requiring to be performed by a third party laboratory) to ensure its
      compliance with the finished product specifications agreed to by SyntheMed.
      STI
      shall provide and/or make available a record of the test results for every
      batch
      manufactured and details of all out of specification investigations. SyntheMed
      will review the documentation and approve the release of each batch of material
      unless otherwise notified (see section 10). 

    

    8.
       Stability 

    STI
      shall
      assist as needed in ensuring the generation of the stability data for the
      Agreement Product.

     

    9.
       Storage.
      Delivery and Transportation 

    STI
      shall
      be responsible for the quality of the Agreement Product on its premises and
      be
      responsible for any subsequent deterioration of the Agreement Product due to
      its
      storage or handling. STI shall utilize agreed upon means for transportation
      for
      delivery of the Agreement Product to SyntheMed or its designee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10.
       Release
      Procedure 

    STI
      shall
      test (or have tested at a third party laboratory as agreed by SyntheMed) the
      Agreement Product to the full finished product specification in accordance
      with
      the requirements specified. SyntheMed shall be responsible for the final release
      of the Agreement Product according to agreed upon procedures. STI shall provide
      or have available: 

     

    
      	 	
              10.1
                

            	
              A
                Certificate of Analysis listing all test results for each batch of
                Agreement Product 

            

    

    
      	 	
              10.2
                

            	
              A
                copy of the manufacturing record for each batch of Agreement Product
                delivered or Certification that all manufacturing was completed in
                accordance with agreed upon
                procedures

            

    

    
      	 	
              10.3
                

            	
              A
                statement signed by a named senior QA person at STI stating that
                the batch
                has been manufactured in accordance with the specifications and in
                accordance with all applicable regulatory requirements.
                

            

    

    
      	 	
              10.4
                

            	
              Any
                other details or documents which may be agreed from time to time
                between
                the Quality Departments of STI and SyntheMed.

            

    

    
      	 	
              10.5
                

            	
              Information
                and copies of investigation reports relating to any batch deviation,
                out
                of specification result or non-compliance with regulatory requirements
                shall be communicated as soon as practicable to the Director, Quality
                Systems at SyntheMed. 

            

    

    

    11. Retention
      Samples 

    STI
      may
      be asked to keep adequate retention samples of the Agreement Product and raw
      materials as agreed to with SyntheMed. STI
      may
      request reasonable fees for storage of materials.

    

    12. Rejection
      and Reworking 

    Prior
      to
      shipment of each batch supplied and where applicable, STI shall submit to
      Synthemed all available information regarding major deviations, out of
      specification results and investigations, or non-compliance with GMP. If a
      batch
      of the Agreement Product is rejected by for any reason, STI must advise
      SyntheMed of the occurrence thereof and any other relevant details. Rework
      of
      the Agreement Product is not permitted without the consent of SyntheMed. (The
      term 'rework' excludes any re-inspection activities that are specified in
      Company's approved procedures). 

    

    13. Recalls
      and Complaints 

    STI
      shall
      conduct any reasonable investigations requested by SyntheMed pursuant to
      complaints received on the batches of the Agreement Product. A report of such
      investigation shall be provided in timely fashion to the Quality Department
      of
      SyntheMed. In the event of a recall of the Agreement Product, STI’s
      responsibility is limited to supplying appropriate information relevant to
      any
      alleged product defect prompting such recall action. 

    

    14. Batch
      records 

    STI
      shall
      keep original copies of all records of manufacture for at least five(5) years
      from the date of manufacture, and shall notify before disposing of such records.
      

    STI
      shall
      also keep records relating to the receipt, testing and use of raw materials
      and
      packaging components for at least five (5) years from the date of approval
      for
      use in manufacturing. 

    

    15.
       Sub-contracting 

    STI
      may
      sub-contract the manufacture, packaging or testing of the Agreement Product
      to
      another site, provided that (a) SyntheMed has been notified of the site and
      (b)
      SyntheMed has approved such site.

     

    16.
       Regulatory
      Requirements 

    STI
      shall
      provide manufacturing information as reasonably requested by SyntheMed in
      support of the preparation of any Regulatory submissions and/or requirements
      for
      the Agreement Product. 

    

    

    Approvals:

    

      
        	
                SyntheMed

              	
                STI

              
	 	 
	
                Date:
                  ________________________

              	
                Date:
                  ______________________

              
	 	 
	
                Name:
                  ________________________

              	
                Name:
                  ______________________

              
	
                 

              	 
	
                Title:
                  Director Quality Systems & RA

              	
                Title:
                  ________________________

              

      

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
 

    

    

    SCHEDULE
      7

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    

    

    SCHEDULE
      7

    LIST
      OF
      SYNTHEMED OWNED EQUIPMENT

    

    ***

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

     

    SCHEDULE
      8

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Schedule
      8

    Proposal
      No. 7009 Rev. 1

    

    Surgical
      Technologies, Inc. (“Seller”) shall perform the activities to necessary to
      process, pack and ship SyntheMed (“Buyer”) Repel-CV according to the following
      price schedule effective as of the date of this agreement:

     

    6      
      Per Shipment:

    
      	§  	
              Labor
                & Paperwork***

            

    

    
      	§  	
              primary
                boxes ***

            

    

    
      	§  	
              Monitor
                (if required)***

            

    

     

    7  

     

    8     
      Monthly
      Fee:

    
      	§  	
              Temporary
                Cooler Storage (off-site) *** 

            

    

    
      	§  	
              Storage:
                ******

            

    

     

    9  

     

    10   
      Special
      Occurrence:

    Respond
      to Alarm     ***

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]