Document:

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        Copy

       

    

    SECURITY
      AGREEMENT

     

    Dated
      as
      of September 22, 2008

     

    between

     

    FORTICELL
      BIOSCIENCE, INC.,

     

    as
      Grantor,

     

    and

     

    PAUL
      ROYALTY FUND, L.P.,

     

    as
      Grantee

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
      OF CONTENTS

     

    
      	 	 	 	 	
              Page

            
	
              ARTICLE
                I DEFINITIONS

            	 	
              1

            
	 	 	 
	
              Section
                1.1.

            	 	
              Certain
                Terms.

            	 	
              1

            
	
              Section 1.2.

            	 	
              Sale
                Agreement Definitions.

            	 	
              2

            
	
              Section
                1.3.

            	 	
              UCC
                Definitions.

            	 	
              2

            
	
              Section
                1.4.

            	 	
              Other
                Interpretive Provisions.

            	 	
              3

            
	 	 	 	 	 
	
              ARTICLE
                II SECURITY INTEREST

            	 	
              3

            
	 	 	 
	
              Section
                2.1.

            	 	
              Grant
                of Security.

            	 	
              3

            
	
              Section
                2.2.

            	 	
              Continuing
                Security Interest.

            	 	
              4

            
	
              Section
                2.3.

            	 	
              Grantor
                Remains Liable.

            	 	
              5

            
	 	 	 	 	 
	
              ARTICLE
                III REPRESENTATIONS AND WARRANTIES

            	 	
              5

            
	 	 	 
	
              Section
                3.1.

            	 	
              Location
                of Collateral, etc.

            	 	
              5

            
	
              Section
                3.2.

            	 	
              Ownership;
                No Liens.

            	 	
              5

            
	
              Section
                3.3.

            	 	
              Validity.

            	 	
              6

            
	
              Section
                3.4.

            	 	
              Intellectual Property.

            	 	
              6

            
	
              Section
                3.5.

            	 	
              Authorization,
                Approval.

            	 	
              6

            
	
              Section
                3.6.

            	 	
              Enforceability.

            	 	
              6

            
	 	 	 	 	 
	
              ARTICLE
                IV COVENANTS

            	 	
              6

            
	 	 	 
	
              Section
                4.1.

            	 	
              As
                to Receivables.

            	 	
              7

            
	
              Section
                4.2.

            	 	
              Insurance.

            	 	
              8

            
	
              Section
                4.3.

            	 	
              Intellectual Property.

            	 	
              8

            
	
              Section
                4.4.

            	 	
              Transfers
                and Other Liens.

            	 	
              8

            
	
              Section
                4.5.

            	 	
              Further
                Assurances.

            	 	
              9

            
	
              Section
                4.6.

            	 	
              General
                Covenants.

            	 	
              9

            
	 	 	 	 	 
	
              ARTICLE
                V RIGHTS AND DUTIES OF GRANTEE

            	 	
              10

            
	 	 	 
	
              Section
                5.1.

            	 	
              Grantee
                Appointed Attorney-in-Fact.

            	 	
              10

            
	
              Section
                5.2.

            	 	
              Grantee
                May Perform.

            	 	
              10

            
	
              Section
                5.3.

            	 	
              Limitations
                on Duties of Grantee.

            	 	
              11

            
	
              Section 5.4.

            	 	
              Reasonable
                Care.

            	 	
              11

            
	 	 	 	 	 
	
              ARTICLE
                VI REMEDIES

            	 	
              11

            
	 	 	 
	
              Section
                6.1.

            	 	
              Certain
                Remedies.

            	 	
              11

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              ARTICLE
                VII MISCELLANEOUS PROVISIONS

            	 	
              12

            
	 	 	 
	
              Section
                7.1.

            	 	
              Amendments.

            	 	
              12

            
	
              Section 7.2.

            	 	
              Release
                of Collateral.

            	 	
              13

            
	
              Section
                7.3.

            	 	
              Notices.

            	 	
              13

            
	
              Section 7.4.

            	 	
              Waiver;
                Cumulative Remedies.

            	 	
              14

            
	
              Section
                7.5.

            	 	
              Successors
                and Assigns.

            	 	
              14

            
	
              Section
                7.6.

            	 	
              Counterparts.

            	 	
              14

            
	
              Section
                7.7.

            	 	
              Severability.

            	 	
              14

            
	
              Section
                7.8.

            	 	
              Governing
                Law and Jurisdiction.

            	 	
              15

            
	
              Section
                7.9.

            	 	
              Waiver
                of Jury Trial.

            	 	
              15

            

    

     

    
      	
              Exhibits

            	 
	 	 
	
              Exhibit
                A

            	
              Form
                of Patent Security Agreement

            
	 	 
	
              Schedules

            	 
	 	 
	
              Schedule
                I

            	
              Locations
                of Certain Collateral

            
	
              Schedule
                II

            	
              Offices
                For Filing Financing Statements

            
	
              Schedule
                3.1

            	
              Names
                and Corporate Reorganizations and Mergers

            
	
              Schedule
                3.2

            	
              Lien
                Exceptions

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    SECURITY
      AGREEMENT

     

    SECURITY
      AGREEMENT
      (as
      amended, supplemented or otherwise modified from time to time, this
      "Security
      Agreement"),
      is
      dated as of September 22, 2008 and entered into between FORTICELL
      BIOSCIENCE, INC.,
      a
      Delaware corporation (the
      "Grantor"),
      and
      PAUL ROYALTY FUND, L.P.,
      a
      Delaware limited partnership (the "Grantee").
      

     

    RECITALS
      

     

    WHEREAS,
      Grantor and Grantee have entered into an Agreement dated as of September 22,
      2008 (the "Sale
      Agreement")
      pursuant to which Grantee is selling, and Grantor is purchasing and redeeming,
      the Securities (as defined in the Sale Agreement) for consideration, including
      payment by Grantor of the Deferred Purchase Price (as defined in the Sale
      Agreement), subject to the terms and conditions in the Sale
      Agreement;

     

    WHEREAS,
      in order to induce Grantee to enter into the Sale Agreement, Grantor is entering
      into this Agreement as Security for the payment and performance by Grantor
      of
      its obligations under the Sale Agreement; and

     

    WHEREAS,
      it is a condition precedent to Grantee's entering into the Sale Agreement and
      selling the Securities to Grantor that Grantor grant to Grantee the security
      interests contemplated by this Agreement.

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, Grantor hereby agrees, for the benefit of
      Grantee, as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

    Section
      1.1. Certain
      Terms.

     

    The
      following terms (whether or not underscored) when used in this Security
      Agreement, including its preamble and recitals, shall have the following
      meanings:

     

    "Account"
      shall
      have the meaning as provided in the UCC.

     

    "Collateral"
      shall
      have the meaning set forth in Section 2.1.

     

    "Event
      of Default"
      shall
      mean there has occurred a breach or default by Grantor of any of the
      Obligations.

     

    "General
      Intangible"
      shall
      have the meaning as provided in the UCC.

     

    "Grantee"
      shall
      have the meaning set forth in the preamble hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Grantor"
      shall
      have the meaning set forth in the preamble hereto. 

     

    "Instrument"
      shall
      have the meaning as provided in the UCC.

     

    "Intellectual
      Property"
      shall
      have the meaning set forth in the Sale Agreement.

     

    "Obligations"
      shall
      mean any and all obligations of Grantor under the Sale Agreement, including
      the
      obligation to pay the Deferred Purchase Price, and the Security
      Documents.

     

    "Patent
      License"
      means
      any written agreement now or hereafter in existence granting to Grantor any
      right to use any invention on which a patent is in existence.

     

    "Patent
      Security Agreement"
      means
      the Patent Security Agreement executed and delivered by Grantor to Grantee
      and
      attached hereto as Exhibit A, as such agreement may be amended, supplemented
      or
      otherwise modified from time to time.

     

    "Proceeds"
      shall
      have the meaning as provided in the UCC.

     

    "Receivables"
      shall
      have the meaning set forth in Section 2.1(c). 

     

    "Sale
      Agreement"
      shall
      have the meaning set forth in the recitals hereto. 

     

    "Security
      Agreement"
      shall
      have the meaning set forth in the preamble hereto. 

     

    "Security
      Documents"
      shall
      mean this Security Agreement and the Patent Security Agreement.

     

    "UCC"
      means
      the Uniform Commercial Code as in effect on the date hereof in the State of
      New
      York, as amended from time to time, and any successor statute; provided
      that if
      by reason of mandatory provision of law, the perfection or the effect of
      perfection or non-perfection of the security interest in the Collateral is
      governed by the Uniform Commercial Code of another jurisdiction, "UCC" means
      the
      Uniform Commercial Code as in effect in such other jurisdiction for purposes
      of
      the provision hereof relating to such perfection or effect of perfection or
      non-perfection.

     

    Section
      1.2. Sale
      Agreement Definitions.

     

    Unless
      otherwise defined herein or the context otherwise requires, terms used in this
      Security Agreement, including its preamble and recitals, have the meanings
      provided in the Sale Agreement. 

     

    Section
      1.3. UCC
      Definitions.

     

    Unless
      otherwise defined herein or the context otherwise requires, terms for which
      meanings are provided in the UCC are used in this Security Agreement, including
      its preamble and recitals, with such meanings. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Section
      1.4. Other
      Interpretive Provisions.

     

    (a) The
      meanings of defined terms are equally applicable to the singular and plural
      forms of the defined terms. 

     

    (b) The
      words
      "hereof," "herein," "hereunder" and similar words refer to this Security
      Agreement as a whole and not to any particular provision of this Security
      Agreement; and subsection, Section, Schedule, and Exhibit references are to
      this
      Security Agreement unless otherwise specified. 

     

    (c)          (i) The
      term
      "documents" includes any and all instruments, documents, agreements,
      certificates, indentures, notices and other writings, however
      evidenced.

     

    (ii) The
      term
      "including" is not limiting and means "including without
      limitation".

     

    (iii) The
      term
      "property" includes any kind of property or asset, personal or mixed, tangible
      or intangible, other than real property. 

     

    (d) Unless
      otherwise expressly provided herein, (i) references to agreements
      (including this Security Agreement) and other contractual instruments shall
      be
      deemed to include all subsequent amendments and other modifications thereto,
      but
      only to the extent such amendments and other modifications are not prohibited
      by
      the terms of this Security Agreement, and (ii) references to any statute or
      regulation are to be construed as including all statutory and regulatory
      provisions consolidating, amending, replacing, supplementing, or interpreting
      the statute or regulation.

     

    (e) The
      captions and headings of this Security Agreement are for convenience of
      reference only and shall not affect the interpretation of this Security
      Agreement.

     

    ARTICLE
      II

     

    SECURITY
      INTEREST

     

    Section
      2.1. Grant
      of Security.

     

    As
      collateral security for the prompt, full and faithful payment and performance
      when due of the Obligations, Grantor hereby assigns, pledges, transfers and
      grants to Grantee a continuing lien on and a security interest in all of
      Grantor's right, title, and interest in and to the following property, wherever
      the same may be now or hereafter located, whether now owned or hereafter
      existing or acquired (the "Collateral"):
      

     

    (a) all
      Intellectual Property (but with respect to Patents and Patent applications
      and
      trademark applications and registrations, only those registered and filed in
      the
      United States);

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b) all
      contracts, agreements, Patent Licenses, and any other documents relating thereto
      now or hereafter in effect, as they may be amended or otherwise modified from
      time to time, that relate to the Intellectual Property or cryo-preserved or
      fresh Orcel products (any and all such contracts, agreements, Patent Licenses
      and documents being the "Agreements");

     

    (c) all
      Accounts, contract rights, payment intangibles, Instruments, and General
      Intangibles, in each case, constituting, comprising, evidencing or otherwise
      relating to any of the foregoing Collateral (any and all such Accounts, contract
      rights, payments intangibles, Instruments, and General Intangibles being the
      "Receivables");
      

     

    (d)  all
      books, records, data bases, and information, in each case, specifically relating
      to any of the foregoing Collateral; 

     

    (e)  all
      money
      now or at any time in the possession or under the control of, or in transit
      to
      Grantee or Grantor relating to any of the foregoing Collateral; and

     

    (f)  all
      products and Proceeds of and from any and all of the foregoing Collateral,
      all
      proceeds which constitute property of the types described in clauses (a)
      through (e) and, to the extent not otherwise included, all payments under
      insurance (whether or not Grantee is the loss payee thereof), including return
      premiums with respect thereto, or any indemnity, warranty, or guaranty payable
      by reason of loss or damage to or otherwise with respect to any of the foregoing
      Collateral; 

     

    provided,
      however,
      that
      the term "Collateral" shall not include, and Grantor shall not be deemed to
      have
      granted a security interest in, any of Grantor's right, title or interest in,
      or
      any rights under, any contract or other agreement existing on the Closing Date
      to the extent that such grant would result in a breach of a term of such
      contract or agreement prohibiting such grant without the consent of the other
      party thereto, other than to the extent that any such term would be rendered
      ineffective pursuant to Section 9-406 of the UCC.

     

    Section
      2.2. Continuing
      Security Interest.

     

    This
      Security Agreement shall create a continuing security interest in the Collateral
      and shall:

     

    (a) remain
      in
      full force and effect until the payment and performance in full of all the
      Obligations;

     

    (b) be
      binding upon Grantor and its successors, transferees and assigns; and

     

    (c) inure,
      together with the rights and remedies of Grantee, to the benefit of Grantee
      and
      its successors and assigns.

     

    Upon
      the
      payment and performance in full of the Obligations, the security interest
      granted herein shall terminate and all rights to the Collateral shall revert
      to
      Grantor. Upon any such termination, Grantee will, at Grantor's sole expense,
      promptly execute and deliver to Grantor such instruments and documents necessary
      and as Grantor shall reasonably request to evidence such termination.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Section
      2.3. Grantor
      Remains Liable.

     

    Anything
      herein to the contrary notwithstanding: 

     

    (a) Grantor
      shall remain liable under the contracts and agreements included in the
      Collateral to the extent set forth therein and shall perform all of its duties
      and obligations under such contracts and agreements to the same extent as if
      this Security Agreement had not been executed;

     

    (b) the
      exercise by Grantee of any of its rights and remedies hereunder shall not
      release Grantor from any of its duties or obligations under any such contracts
      or agreements included in the Collateral; and 

     

    (c) Grantee
      shall not have any obligation or liability under any such contracts or
      agreements included in the Collateral by reason of this Security Agreement,
      and
      Grantee shall not be obligated to perform or fulfill any of the obligations
      or
      duties of Grantor thereunder or to take any action to collect or (x) to make
      any
      inquiry as to the nature or sufficiency of any payment Grantor may be entitled
      to receive thereunder; (y) present or file and claim or (z) enforce any claim
      for payment assigned hereunder. 

     

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Grantor
      represents and warrants to Grantee as follows:

     

    Section
      3.1. Location
      of Collateral, etc.

     

    (a) On
      the
      date hereof, the place(s) of business and chief executive office of Grantor
      and
      the office(s) where Grantor keeps its records concerning the Receivables are
      located at the addresses set forth on Item A of Schedule I.

     

    (b) Grantor
      has no trade name.

     

    (c) Except
      as
      set forth on Schedule
      3.1,
      during
      the past five years, Grantor has not been known by any name different from
      the
      one set forth on the signature page hereto, and Grantor has not been the subject
      of any merger or other corporate reorganization. 

     

    (d) None
      of
      the Receivables is evidenced by a promissory note or other instrument.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
      3.2. Ownership;
      No Liens.

     

    Grantor
      owns the Collateral free and clear of any Liens except for the security interest
      created by this Security Agreement and except as set forth on Schedule
      3.2.
      No
      effective security agreement, financing statement, assignment, equivalent
      security, lien or other instrument similar in effect covering all or any part
      of
      the Collateral is on file or of record in any public office, except such as
      may
      have been filed in favor of Grantee relating to this Security Agreement and
      except as set forth on Schedule
      3.2.

     

    Section
      3.3. Validity.

     

    This
      Security Agreement creates a valid security interest in the Collateral securing
      the payment and performance in full of the Obligations. Upon the filing of
      appropriate financing statements in the applicable filing offices in the
      jurisdictions listed in Schedule
      II,
      all
      filings, registrations and recordings necessary or appropriate to create,
      preserve, protect and perfect the first priority security interest granted
      by
      Grantor to Grantee in the Collateral will have been accomplished and will create
      a perfected security interest therein prior to the rights of all other Persons
      therein and subject to no other Liens.

     

    Section
      3.4. Intellectual Property.

     

    The
      Patents constitute all registered Intellectual Property owned or used by Grantor
      and the Agreements constitute all agreements relating to Intellectual Property
      owned or used by Grantor. The execution, delivery and performance of this
      Security Agreement by Grantor will not violate or cause a default under any
      of
      the Intellectual Property or any material agreement in connection
      therewith.

     

    Section
      3.5. Authorization,
      Approval.

     

    No
      authorization, approval, or other action by, and no notice to or filing with,
      any Government Authority or other Person is required either:

     

    (a) for
      the
      grant by Grantor of the security interest granted hereby or for the execution,
      delivery, and performance of this Security Agreement by Grantor; or

     

    (b) for
      the
      perfection of or exercise by Grantee of its rights and remedies hereunder,
      other
      than the filing of financing statements in the offices listed in Schedule II.
      

     

    Section
      3.6. Enforceability. 

     

    This
      Security Agreement is the legally valid and binding obligation of Grantor,
      enforceable against Grantor in accordance with its terms.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV

     

    COVENANTS

     

    Grantor
      hereby covenants and agrees that, so long as this Security Agreement shall
      remain in effect, Grantor agrees to the following:

     

    Section
      4.1. As
      to
      Receivables. 

     

    (a) Grantor
      shall keep its place(s) of business and its chief executive office and the
      office(s) where it keeps its books and records (including those concerning
      the
      Receivables) and all original copies of the Agreements located, in each case,
      at
      its address specified in Schedule
      I,
      or,
      upon 30 days' prior written notice to Grantee, at such other locations in a
      jurisdiction where all actions required by the first sentence of Section 4.4
      shall have been taken with respect to the Receivables and the License
      Agreements; not change its name or its state or place of incorporation or
      organization except upon 30 days' prior written notice to Grantee; and hold
      and
      preserve such books and records. 

     

    (b) Except
      as
      otherwise provided in this subsection (b), until an Event of Default has
      occurred and is continuing, Grantor shall continue to collect, at its own
      expense, all amounts due or to become due Grantor under the Agreements. In
      connection with such collections, provided no Event of Default shall have
      occurred and be continuing, Grantor may take (and, at Grantee's direction,
      shall
      take) such action as Grantor may deem necessary or advisable to enforce
      collection of the Agreements. At any time after an Event of Default has occurred
      and is continuing, Grantee shall have the right to notify the account debtors
      or
      obligors under any Receivables of the security interest of Grantee in such
      Receivables to Grantee and to direct such account debtors or obligors to make
      payment to Grantee of any amounts due or to become due thereunder and enforce
      collection of any of the Receivables by suit or otherwise and surrender, release
      or exchange all or any part thereof, or adjust, settle or compromise or extend
      or renew for any period (whether or not longer than the original period) any
      indebtedness thereunder or evidenced thereby. If an Event of Default has
      occurred and is continuing, upon the request of Grantee, Grantor will, at its
      own expense, notify any parties obligated on any of the Receivables to make
      payment to Grantee of any amounts due or to become due thereunder, and in such
      event, Grantee is authorized to endorse, in the name of Grantor, any item
      representing any payment on or other proceeds of any of the Receivables.

     

    (c) After
      delivery to Grantor by Grantee of a notice that an Event of Default has occurred
      and is continuing: (i) all amounts and proceeds (including Instruments)
      received by Grantor in respect of any Receivables shall be received in trust
      for
      the benefit of Grantee hereunder, shall be segregated from other funds of
      Grantor, and shall be forthwith paid over to Grantee in the same form as so
      received (with any necessary endorsements) to be held as cash collateral and
      applied as provided by this Security Agreement; and (ii) Grantor shall not
      adjust, settle, or compromise the amount or payment of any Receivable, or
      release wholly or partly any account debtor or obligor thereof, or allow any
      credit or discount thereon. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (d) After
      the
      occurrence and during the continuance of an Event of Default, (A) Grantee may
      in
      its own name or in the name of others communicate with account debtors in order
      to verify with them to Grantee's reasonable satisfaction the existence, amount
      and terms of any Receivables and (B) Grantee shall have the right, at Grantor's
      expense, to make test verifications of the Receivables in any reasonable manner
      and through any medium that it considers advisable, and Grantor agrees to
      furnish all such assistance as Grantee may reasonably require in connection
      therewith.

     

    Section
      4.2. Insurance.

     

    Grantor
      will maintain or cause to be maintained at all times insurance against loss
      or
      damage sufficient to cover all the Collateral that are of an insurable nature
      to
      the same extent assets of a similar character are usually so insured by
      companies similarly situated and owning like assets, with insurers believed
      by
      Grantor to be responsible and reputable. If an Event of Default exists at the
      time any insurance proceeds relating to the Collateral are received, all such
      proceeds shall be paid to Grantee for application in accordance with the terms
      and conditions of this Security Agreement.

     

    Section
      4.3. Intellectual Property.

     

    Grantor
      shall concurrently herewith deliver to Grantee the Patent Security Agreement
      and
      all other documents, instruments and other items as may be necessary for Grantee
      to file such agreements with the United States Patent and Trademark Office
      and
      any similar domestic or foreign office, department or agency. If, before the
      Obligations are paid in full, Grantor obtains any new Intellectual Property
      or
      rights thereto or becomes entitled to the benefit of any Intellectual Property
      not listed on the schedules to each security agreement, Grantor shall give
      to
      Grantee prompt written notice thereof, and shall amend the respective security
      agreement to include any such new Intellectual Property. Grantor shall: (a)
      preserve and maintain all rights in the Intellectual Property; and (b) upon
      and
      after the occurrence of an Event of Default, use its best efforts to obtain
      any
      consents, waivers or agreements necessary to enable Grantor to exercise its
      remedies with respect to the Intellectual Property. Grantor shall not abandon
      any right to file a patent or trademark application relating to the Intellectual
      Property nor shall Grantor abandon any pending patent or trademark application
      or patent, trademark or copyright (including without limitation any Patents
      or
      Patent Licenses) without the prior written consent of Grantee.

     

    Section
      4.4. Transfers
      and Other Liens.

     

    Grantor
      shall not: 

     

    (a) grant
      a
      security interest in the Collateral that in any way conflicts with Grantee's
      security interest pursuant to this Security Agreement or any of Grantee's rights
      under this Security Agreement, including without limitation, the exercise of
      remedies hereunder; or

     

    (b) sell,
      assign (by operation of law or otherwise), lease, transfer or otherwise dispose
      of any of, or grant any Person an option with respect to, the Collateral.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Section
      4.5. Further
      Assurances.

     

    Grantor
      agrees that, from time to time at its own cost and expense, Grantor will
      promptly execute and deliver and will cause to be executed and delivered all
      further instruments, assignments, notices, agreements and documents, including,
      without limitation, financing and continuation statements, and will take all
      further action and will cause all further action to be taken, that may be
      reasonably necessary or desirable, or that Grantee may reasonably request,
      in
      order to create, preserve, perfect and protect any security interest granted
      or
      purported to be granted hereby and the priority thereof or to enable Grantee
      to
      exercise and enforce its rights and remedies hereunder with respect to any
      Collateral. Without limiting the generality of the foregoing Grantor
      will:

     

    (a) if
      any
      Collateral shall be evidenced by a promissory note or other instrument or
      negotiable document, deliver and pledge to Grantee hereunder such promissory
      note, instrument or negotiable document duly endorsed and accompanied by duly
      executed instruments of transfer or assignment, all in form and substance
      reasonably satisfactory to Grantee; 

     

    (b) execute
      and file, record or register such financing or continuation statements, or
      amendments thereto, and such other instruments, assignments or notices, as
      may
      be necessary or desirable, or as Grantee may request, in order to create,
      preserve, perfect and protect the security interests and other rights granted
      or
      purported to be granted to Grantee; 

     

    (c) furnish
      to Grantee, from time to time, statements and schedules further identifying
      and
      describing the Collateral and such other reports in connection with the
      Collateral as Grantee may reasonably request, and all in reasonable detail;
      and

     

    (d) at
      Grantee's request, appear in and defend any action or proceeding that may affect
      Grantor's title to or Grantee's security interest in the
      Collateral.

     

    With
      respect to the foregoing and the grant of the security interest hereunder,
      Grantor hereby authorizes Grantee to file one or more financing or continuation
      statements, and amendments thereto, relative to all or any part of the
      Collateral without the signature of Grantor where permitted by law. A carbon,
      photographic, or other reproduction of this Security Agreement or any financing
      statement covering the Collateral or any part thereof shall be sufficient as
      a
      financing statement where permitted by law.  

     

    Section
      4.6. General
      Covenants. 

     

    Without
      limiting any of the foregoing covenants, Grantor agrees (a) not to use or permit
      any Collateral to be used unlawfully or in material violation of any provision
      of this Security Agreement, any other Transaction Document or any applicable
      statute, regulation or ordinance or any policy of insurance covering the
      Collateral; and (b) to pay promptly when due all taxes, assessments, charges,
      encumbrances and Liens now or hereafter imposed upon or affecting any
      Collateral.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

     

    RIGHTS
      AND DUTIES OF GRANTEE 

     

    Section
      5.1. Grantee
      Appointed Attorney-in-Fact.

     

    Grantor
      hereby irrevocably appoints Grantee (and all Persons designated for that
      purpose) as Grantor's true and lawful attorney-in-fact, with full authority
      and
      power in the place and stead of Grantor and in the name of Grantor, Grantee
      or
      otherwise, from time to time in Grantee's discretion from and after the
      occurrence and during the continuation of an Event of Default and at such time
      or times thereafter as Grantee may, in its sole discretion determine, to take
      any appropriate action and to execute any instrument that Grantee may deem
      reasonably necessary or advisable to accomplish the purposes of this Security
      Agreement (but Grantee shall not be obligated to and shall have no liability
      to
      Grantor or any third party for failure so to do) including, without limitation:
      

     

    (a) to
      ask,
      demand, collect, enforce, sue for, recover, compromise, receive, and give
      acquittance and receipts for moneys due and to become due under or in respect
      of
      any of the Collateral; 

     

    (b) to
      receive, endorse, and collect any checks, drafts or other instruments,
      documents, and chattel paper in connection with clause (a) above;

     

    (c) to
      file
      any claims or take any action or institute any proceedings (or to settle, adjust
      or compromise any such proceeding) that Grantee may deem necessary or desirable
      for the collection of any of the Collateral or otherwise to enforce the rights
      of Grantee with respect to any of the Collateral;

     

    (d) to
      perform the affirmative obligations of Grantor hereunder (including all
      obligations of Grantor pursuant to Section 4.4); 

     

    (e) to
      execute and deliver for and on behalf of Grantor any and all instruments,
      documents, agreements, and other writings necessary or advisable for the
      exercise on behalf of Grantor of any rights, benefits or options created or
      existing under or pursuant to the Collateral; and

     

    (f) to
      execute endorsements, assignments, or other instruments of conveyance and
      transfer. 

     

    Grantor
      hereby acknowledges, consents and agrees that the power of attorney granted
      pursuant to this Section 5.1 is irrevocable and coupled with an interest.

     

    Section
      5.2. Grantee
      May Perform.

     

    If
      Grantor fails to perform any agreement contained herein, Grantee may itself
      (but
      shall not be obliged to) perform, or cause performance of, such agreement,
      provided
      that
      Grantee shall in any event first have given Grantor written notice of its intent
      to do the same and Grantor shall not have, within 30 days of such notice (or
      such shorter period as Grantee may reasonably determine is necessary in order
      to
      preserve the benefits of this Security Agreement with respect to any material
      portion of the Collateral), paid such claim or obtained to Grantee's
      satisfaction the release of the claim or Lien to which such notice relates.
      Grantor agrees to reimburse Grantee upon demand for any costs and expenses,
      including, without limitation, reasonable attorneys' fees, Grantee incurs while
      acting as Grantor's attorney-in-fact hereunder, all of which costs and expenses
      are included in the Obligations secured hereby. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
      5.3. Limitations
      on Duties of Grantee.

     

    Grantee
      shall be obligated to perform such duties and only such duties as are
      specifically set forth in this Security Agreement, and no implied covenants
      or
      obligations shall be read into this Security Agreement against Grantee. If
      an
      Event of Default has occurred and is continuing, Grantee shall exercise the
      rights and powers vested in it by this Security Agreement, and shall not be
      liable (except for its gross negligence or willful misconduct) with respect
      to
      any action taken by it, or omitted to be taken by it, in accordance herewith.
      

     

    Section
      5.4. Reasonable
      Care.

     

    It
      is
      understood and agreed between the parties hereto that Grantee's duty with
      respect to the custody, safekeeping, and physical preservation of the Collateral
      in its possession should be to deal with it in the same manner as Grantee deals
      with similar property for its own account; provided,
      however,
      that
      Grantee shall not be required to make any presentment, demand, or protest,
      or
      give any notice, and need not take any action to preserve any rights against
      any
      other Person with respect to the Collateral.

     

    ARTICLE
      VI

     

    REMEDIES

    Section
      6.1. Certain
      Remedies.

     

    If
      any
      Event of Default shall have occurred and is continuing:

     

    (a) Grantee
      may exercise in respect of the Collateral, in addition to other rights available
      to it at law or in equity or otherwise, all the rights and remedies of a secured
      party on default under the UCC (whether or not the UCC applies to the affected
      Collateral) and also may (i) require Grantor to, and Grantor hereby agrees
      that it will, at its expense and upon request of Grantee forthwith, assemble
      all
      or part of the Collateral as directed by Grantee and make it available to
      Grantee at a place to be designated by Grantee that is reasonably convenient
      to
      both parties, (ii) exercise any and all rights and remedies of Grantor
      under or in connection with the Collateral, (iii) withdraw all monies,
      securities and other property in the Grantor accounts for application to the
      Obligations, (iv) foreclose or otherwise enforce Grantee's security interest
      in
      any manner permitted by law or provided for in this Security Agreement,
      (v) without notice except as specified below, sell the Collateral or any
      part thereof in one or more parcels at public or private sale, at any place
      or
      places for cash, on credit, or for future delivery, and upon such other terms
      as
      Grantee may deem commercially reasonable, (vi) recover from Grantor all
      costs and expenses, including, without limitation, reasonable attorneys' fees,
      incurred or paid by Grantee in exercising any right, power, privilege or remedy
      provided by this Security Agreement or by law, (vii) without notice or
      demand of legal process, all of which are hereby expressly waived by Grantor,
      enter into property where any Collateral is located and take possession thereof,
      and (viii) prior to the disposition of the Collateral, prepare it for
      disposition in any manner and to the extent Grantee deems appropriate;
provided,
      however,
      that
      notwithstanding the foregoing to the contrary, Grantee may sell or otherwise
      dispose the Collateral or any portion thereof in its then condition without
      any
      preparation or processing. Grantor agrees that, to the extent notice of sale
      shall be required by law, at least ten (10) days' prior notice to Grantor of
      the
      time and place of any public sale or the time after which any private sale
      is to
      be made shall constitute reasonable notification. Grantee shall not be obligated
      to make any sale of Collateral regardless of notice of sale having been given.
      Grantee may adjourn any public or private sale from time to time by announcement
      at the time and place fixed therefor, and such sale may, without further notice,
      be made at the time and place to which it was so adjourned. Upon any sale or
      other disposition pursuant to this Security Agreement, Grantee shall have the
      right to deliver, assign and transfer to grantee thereof the Collateral or
      portion thereof and transfer to grantee thereof the Collateral or portion
      thereof so sold or disposed of. Each grantee at any such sale or other
      disposition (including Grantee) shall hold the Collateral free from any claim
      or
      right of whatever kind, including any equity or right of redemption of Grantor
      and Grantor specifically waives (to the extent permitted by law) all rights
      of
      redemption, stay or appraisal which it has or may have under any rule of law
      or
      statute now existing or hereafter adopted.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (b) All
      cash
      proceeds received by Grantee in respect of any sale of, collection from, or
      other realization upon all or any part of the Collateral shall be applied:
      first,
      to all
      costs, fees and expenses incurred by Grantee; and second,
      to the
      Obligations. If any non-cash proceeds are received in connection with any sale
      of Collateral, Grantee shall not apply such non-cash proceeds to the Obligations
      unless and until such proceeds are converted to cash; provided,
      however,
      that if
      such non-cash proceeds are not expected on the date of receipt thereof to be
      converted to cash within one year after such date, Grantee shall nonetheless
      use
      commercially reasonable efforts to convert such non-cash proceeds to cash within
      such one-year period. Any surplus of such cash or cash proceeds held by Grantee
      after payment in full of all the Obligations shall be paid over to Grantor
      or to
      whomsoever may be lawfully entitled to receive such surplus.

     

     

    ARTICLE
      VII

     

    MISCELLANEOUS
      PROVISIONS

     

    Section
      7.1. Amendments.

     

    No
      amendment, modification or waiver of any provision of this Security Agreement,
      and no consent to any departure by Grantor herefrom shall in any event be
      effective unless the same shall be in writing and signed by Grantee, and then
      such waiver or consent shall be effective only in the specific instance and
      for
      the specific purpose for which given.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      7.2. Release
      of Collateral.

     

    If
      any of
      the Collateral shall be sold, transferred, or otherwise disposed of by Grantor
      in a transaction not prohibited by this Agreement, then Grantee shall, at
      Grantor's written request, promptly execute and deliver to Grantor (at the
      sole
      cost and expense of Grantor) such instruments or documents necessary and as
      Grantor shall reasonably request to release the Liens created hereby on such
      Collateral, including any necessary UCC amendment, termination statement or
      partial termination statement.

     

    Section
      7.3. Notices.

     

    Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon
      hand
      delivery, by telecopy or facsimile at the address or number designated below
      (if
      delivered on a business day during normal business hours where such notice
      is to
      be received), or the first business day following such delivery (if delivered
      other than on a business
      day during normal business hours where such notice is to be received) or (b)
      on
the
      second business day following the date of mailing by express courier service,
      fully prepaid,
      addressed to such address, or upon actual receipt of such mailing, whichever
      shall
      first occur.

     

    Address
      of Grantee

     

    Paul
      Royalty Fund, L.P.

    c/o
      Paul
      Capital Advisors, L.L.C.

    Two
      Grand
      Central Tower

    140
      East
      45th
      Street,
      44th
      Floor

    New
      York,
      New York 10017

    Attention:
      Lionel Leventhal

    Telephone:
      (646) 264-1106

    Facsimile:
      (646) 264-1101

     

    with
      a copy to

     

    Chadbourne
      & Parke LLP

    30
      Rockefeller Plaza

    New
      York,
      New York 10012

    Attention:
      Morton E. Grosz and A. Robert Colby

    Telephone:
      (212) 408-5592

    Facsimile:
      (212) 541-5369

     

    Address
      of the Grantor

     

    3960
      Broadway 

    New
      York,
      New York 10032

    Attention:
      Alan W. Schoenbart

    Telephone:
      (646) 218-1885

    Facsimile:
      (212) 740-2570

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    with
      a copy to

     

    Feder
      Kaszovitz Isaacson Weber Skala Bass & Rhine LLP

    750
      Lexington Avenue

    New
      York,
      New York 10022

    Attention:
      Gabriel Kaszovitz, Esq.

    Telephone:
      (212) 888-8200

    Facsimile:
      (212) 888-7776

     

    Section
      7.4. Waiver;
      Cumulative Remedies.

     

    (a) No
      failure to exercise and no delay in the exercise, on the part of Grantee, of
      any
      right, remedy, power, or privilege hereunder and no course of dealing with
      respect thereto shall impair such right, remedy, power or privilege or be
      construed to or operate as a waiver thereof; nor shall any single or partial
      exercise of any right, remedy, power or privilege hereunder preclude any other
      or further exercise thereof, or the exercise of any other right, remedy, power
      or privilege.

     

    (b) Grantor
      waives any right to require Grantee to proceed against any Person or to exhaust
      any Collateral or to pursue any remedy in such Grantee's power.

     

    (c) The
      rights, powers and remedies of Grantee under this Security Agreement shall
      be in
      addition to all rights, powers and remedies given to Grantee by virtue of any
      statute or rule of law, the Sale Agreement or any other agreement, all of which
      rights, powers and remedies shall be cumulative and may be exercised
      successively or concurrently without impairing Grantee's security interest
      in
      the Collateral.

     

    Section
      7.5. Successors
      and Assigns.

     

    The
      provisions of this Security Agreement shall be binding upon and inure to the
      benefit of the parties hereto and their respective successors and assigns,
      except that Grantor may not assign or transfer any of its rights or obligations
      under this Security Agreement without the prior written consent of
      Grantee.

     

    Section
      7.6. Counterparts.

     

    This
      Security Agreement may be executed in any number of separate counterparts,
      each
      of which, when so executed, shall be deemed an original, and all of said
      counterparts taken together shall be deemed to constitute but one and the same
      instrument. 

     

    Section
      7.7. Severability.

     

    The
      illegality or unenforceability of any provision of this Security Agreement
      or
      any instrument or agreement required hereunder shall not in any way affect
      or
      impair the legality or enforceability of the remaining provisions of this
      Security Agreement or any instrument or agreement required
      hereunder.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      7.8. Governing
      Law and Jurisdiction.

     

    (a) THIS
      SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
      THE
      LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW
      PRINCIPLES).

     

    (b) ANY
      LEGAL
      ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY AGREEMENT MAY BE BROUGHT
      IN
      ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND
      CITY OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS SECURITY AGREEMENT, GRANTOR
      HEREBY IRREVOCABLY CONSENTS TO AND ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS
      PROPERTY, GENERALLY AND UNCONDITIONALLY THE NON-EXCLUSIVE JURISDICTION OF SUCH
      COURTS. GRANTOR HEREBY FURTHER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
      ANY
      OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
      NON CONVENIENS,
      WHICH
      IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
      SUCH
      JURISDICTION IN RESPECT OF THIS SECURITY AGREEMENT OR ANY DOCUMENT RELATED
      HERETO. 

     

    Section
      7.9. Waiver
      of Jury Trial.

     

    EACH
      OF
      GRANTOR AND GRANTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING,
      CLAIM OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT
      OR
      THE TRANSACTIONS CONTEMPLATED HEREBY. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
      AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SECURITY
      AGREEMENT.

     

    [Signature
      page follows]

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Grantor and Grantee have caused this Security Agreement to
      be
      duly executed and delivered by their respective duly authorized officers as
      of
      the date first above written. 

     

    
      	
              GRANTOR:

            	
              FORTICELL
                BIOSCIENCE, INC.

            	 
	 	 	 
	 	
              By:

            	
              /s/
                Alan W. Schoenbart

            	 
	 	 	
              Name: 

            	
              Alan
                W. Schoenbart

            	 
	 	 	
              Title:

            	
              Chief
                Executive Officer

            	 

    

     

    
      	
              GRANTEE:

            	
              PAUL
                ROYALTY FUND, L.P.

            	 
	 	 	 	 
	 	
              By: 

            	
              Paul
                Capital Management, LLC, 

            	 
	 	 	
              its
                General Partner

            	 
	 	 	 	 	 
	 	 	
              By: 

            	
              Paul
                Capital Advisors, L.L.C.

            	 
	 	 	 	
              Its
                Manager

            	 
	 	 	 	 	 	 
	 	 	 	
              By: 

            	
              /s/
                Lionel Leventhal

            	 
	 	 	 	 	
              Name: 

            	
              Lionel Leventhal

            	 
	 	 	 	 	
              Title:

            	
              Manager

            	 

    

     

    [SIGNATURE
      PAGE TO SECURITY AGREEMENT]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    to
      Security Agreement

     

    FORM
      OF PATENT SECURITY AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

    to
      Security Agreement

     

    LOCATIONS
      OF CERTAIN COLLATERAL

     

    Place(s)
      Of Business And Chief Executive Office of Grantor:
      

     

    Grantor's
      principal place of business and chief executive offices are located at 3960
      Broadway, New York, New York 10032.

    

    Addresses
      of the Properties at which Grantor Maintains Records Relating to the
      Collateral:

     

    3960
      Broadway

    New
      York,
      New York 10032

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      II 

    to
      Security Agreement

     

    OFFICES
      FOR FILING FINANCING STATEMENTS

     

    Delaware
      Secretary of State

    UCC
      Division

    P.O.
      Box
      793

    Dover,
      DE
      19903

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3.1 

    to
      Security Agreement

     

    NAMES
      AND CORPORATE REORGANIZATIONS AND MERGERS

     

    On
      December 26, 2007 at 5:46 p.m., Orcel LLC, a Delaware limited liability company,
      merged with and into Hapto Biotech, Inc., a Delaware corporation and a
      wholly-owned subsidiary of Forticell Bioscience, Inc. (then known as Ortec
      International, Inc.) with Hapto Biotech, Inc. as the surviving entity. On
      December 26, 2007 at 6:04 p.m. Hapto Biotech, Inc. merged with and into
      Forticell Bioscience, Inc. (then known as Ortec International, Inc.) with
      Forticell Bioscience, Inc. the surviving entity.

     

    On
      December 27, 2008, Forticell Bioscience, Inc. changed its name from Ortec
      International, Inc. to Forticell Bioscience, Inc.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3.2 

    to
      Security Agreement

     

    LIEN
      EXCEPTIONS

     

    None.Execution
      Copy

     

    PATENT
      SECURITY AGREEMENT

     

    WHEREAS,
      FORTICELL BIOSCIENCE, INC.,
      a
      Delaware corporation ("Grantor"),
      owns
      the Patents and Patent Applications listed on Schedule 1 annexed hereto, and
      is
      a party to the Patent Licenses listed on Schedule l annexed hereto;
      and

     

    WHEREAS,
      Grantor
      and Paul Royalty Fund, L.P., a Delaware limited partnership ("Grantee"),
      are
      parties to an Agreement dated as of September 22, 2008 (the "Sale
      Agreement"),
      pursuant to which, among other things, Grantee is selling, assigning,
      transferring and conveying to Grantor, and Grantor is purchasing from Grantee,
      all of Grantee's Securities (as defined in the Sale Agreement);

     

    WHEREAS,
      pursuant to the terms of the Security Agreement dated as of September 22, 2008
      (the "Security
      Agreement;"
      all
      capitalized terms defined in the Sale Agreement or the Security Agreement and
      not otherwise defined herein have the respective meanings provided for in the
      Sale Agreement or the Security Agreement), between Grantor and Grantee, Grantor
      has granted to Grantee a security interest as contemplated by the Security
      Agreement, including, without limitation, all right, title and interest of
      Grantor in, to and under all now owned and hereafter acquired Patents, Patent
      applications and Patent Licenses, and all products and proceeds thereof (to
      the
      extent granted therein), to secure payment and performance of Grantor's
      obligations under the Sale Agreement and the other Obligations;

     

    NOW,
      THEREFORE,
      for
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, Grantor does hereby grant to Grantee a continuing security
      interest in all of Grantor's right, title and interest in, to and under the
      following (all of the following items or types of property being herein
      collectively referred to as the "Patent
      Collateral"),
      whether presently existing or hereafter created or acquired:

     

    (1) each
      U.S.
      Patent and Patent application included in the Intellectual Property, including,
      without limitation, each Patent and Patent application referred to in Schedule
      l
      annexed hereto, together with any reissues, continuations or extensions thereof,
      and all of the goodwill of the business conducted in the U.S. connected with
      the
      use of, and symbolized by, each such Patent and Patent application;

     

    (2) each
      Patent License, including, without limitation, each Patent License listed on
      Schedule 1 annexed hereto; and

     

    (3) all
      products and proceeds of the foregoing, including, without limitation, any
      claim
      by Grantor against third parties for past, present or future infringement of
      any
      such Patent, including, without limitation, any Patent referred to in Schedule
      1
      annexed hereto, any Patent issued pursuant to a Patent Application referred
      to
      in Schedule l and any patent licensed under any Patent License listed on
      Schedule 1 annexed hereto.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
      security interest is granted in conjunction with the security interests granted
      to Grantee pursuant to the Security Agreement. Grantor hereby acknowledges
      and
      affirms that the rights and remedies of Grantee with respect to the security
      interest in the Patent Collateral made and granted hereby are more fully set
      forth in the Security Agreement, the terms and provisions of which are
      incorporated by reference herein as if fully set forth herein.

     

    [Signature
      page follows]

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Grantor has caused this Patent Security Agreement to be duly
      executed by its duly authorized officer thereunto as of the 22nd day of
      September, 2008.

     

    
      	
              FORTICELL
                BIOSCIENCE, INC.

            
	 	 
	
              By:

            	
              /s/
                Alan W. Schoenbart

            
	 	
              Name: 
                Alan W. Schoenbart

            
	 	
              Title:   
                Chief Executive Officer

            

    

     

    Agreed
      and Accepted as of the

    22nd
      day
      of September, 2008

     

    

      
        	
                PAUL
                  ROYALTY FUND, L.P. 

              
	 	 	 	 
	
                By:
                  

              	
                Paul
                  Capital Management, LLC,

              
	 	
                its
                  General Partner

              
	 	 	 	 
	 	
                By:

              	
                Paul
                  Capital Advisors, L.L.C.

              
	 	 	
                Its
                  Manager

              
	 	 	 	 
	 	 	
                By:
                  

              	
                /s/
                  Lionel Leventhal

              
	 	 	 	
                Name: 
                  Lionel Leventhal

              
	 	 	 	
                Title: 
                  Manager

              

      

    

     

    [SIGNATURE
      PAGE TO PATENT SECURITY AGREEMENT]

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    ACKNOWLEDGEMENT

     

    
      	
              STATE
                OF NEW YORK

            	
              )

            
	 	
              )
                ss.:

            
	
              COUNTY
                OF NEW YORK

            	
              )

            

    

    

    On
      the
      22nd day of September, 2008 before me personally appeared Alan Schoenbart,
      to me
      personally known or proved to me on the basis of satisfactory evidence to be
      the
      person described in and who executed the foregoing instrument as the _________
      of Forticell Bioscience Inc., who being by me duly sworn, did depose and say
      that he is the __________ of Forticell Bioscience, Inc., the corporation
      described in and which executed the foregoing instrument; that he knows the
      seal
      of said corporation; that the seal affixed to said corporation by order of
      its
      secretary; that he signed his name thereto by like order; and that he
      acknowledged said instrument to be the free act and deed of said
      corporation.

     

    
      	
              __________________________________                                              

            
	
              Notary
                Public

            

    

     

    (Seal)

     

    My
      commission expires:

     

                                                                   

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Schedule
      I to Patent Security Agreement

     

    PATENTS

     

    
      	
              OrCel®
                U.S. Patents

            	 	
              Title

            	 	
              Expiration

            
	 	 	 	 	 
	
              5282859/Re.
                35399

            	 	
              Composite
                Living Skin Equivalent

            	 	
              02/01/11

            
	
              6039760

            	 	
              Composite
                Living Skin Equivalent

            	 	
              02/01/11

            
	
              6500464B2

            	 	
              Trilayered
                Collagen Construct

            	 	
              12/28/20

            
	
              6638709

            	 	
              Processes
                for Making Cryopreserved Composite Living Constructs

            	 	
              10/28/21

            

    

     

    PATENT
      APPLICATIONS

     

    
      	
              U.S.
                Patent Application Serial No. 09/749,226

            	 	
              Filing
                Date – December 27, 2000

            
	 	 	 
	
              U.S.
                Patent Application Serial No. 10/032,925

            	 	
              Filing
                Date – December 26, 2001

            
	 	 	 
	
              U.S.
                Patent Application Serial No. 10/032,929

            	 	
              Filing
                Date – December 26, 2001

            

    

     

    PATENT
      LICENSES

     

    None.

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