Document:

ex10_51.htm

    
      

    

    Exhibit
10.51

     

    CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.  THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY AN ASTERIK IN
BRACKETS [*].  THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION.

     

    
 

     

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

     

    by
and between

     

    MUSCULOSKELETAL
TRANSPLANT FOUNDATION, INC.

     

    (“MTF”)

     

    and

     

    ORTHOFIX
HOLDINGS, INC.

     

    (“ORTHOFIX”)

     

     

    
      

    

    
      
        [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

      

      
        
          
          

        

        
           

          
            

          

        

        
          
          

        

      

    

     

    MATRIX COMMERCIALIZATION
COLLABORATION AGREEMENT

     

    THIS MATRIX COMMERCIALIZATION
COLLABORATION AGREEMENT (this “Agreement”) is dated
as of July 24, 2008 and effective as of the Effective Date (as defined herein),
by and between Musculoskeletal Transplant Foundation, Inc., a non-profit corporation
formed under the laws of the District of Columbia, and having a principal place
of business at 125 May Street, Suite 300, Edison, New Jersey 08837 (“MTF”), and Orthofix
Holdings, Inc., a
corporation organized under the laws of the State of Delaware, and having a
principal place of business at 10115 Kincey Avenue, Suite 250, Huntersville,
North Carolina 28078 (“Orthofix”) (each
individually a “Party” and
collectively the “Parties”).

     

    W I T N E S S E T H:

     

    WHEREAS, the Parties desire to
collaborate with respect to the development and commercialization of  an
allogeneic cancellous bone matrix containing viable mesenchymal stem cells
and/or osteoprogenitor cells and conforming to the Specifications (as defined
herein) (the “Matrix”);

     

    WHEREAS, neither Party currently
makes the Matrix commercially available, and the Parties believe that they can
develop and commercialize the Matrix more effectively and efficiently
together than on their own;

     

    WHEREAS, in furtherance of the
foregoing, simultaneously on the date hereof, Orthofix and MTF have entered into
that certain Matrix Development Collaboration Agreement dated as of the date
hereof (the “Development
Agreement”), pursuant to which the Parties will collaborate on research
and development of the Matrix and further modification of the Specifications (as
defined therein and, for purposes hereof, as the same are revised or
supplemented from time to time during the Term in accordance with Section 10.4, the
“Specifications”);

     

    WHEREAS, pursuant to the
Development Agreement, (a) each of MTF and Orthofix will retain ownership
of all right, title and interest in and to all of the Existing MTF Technology
(as defined herein) and the Existing Orthofix Technology (as defined herein),
respectively, and (b) each of MTF and Orthofix will assign to the other
Party an undivided joint ownership interest in and to all right, title and
interest in all Developed Technology (as defined herein);

     

    WHEREAS, the Parties wish,
subject to the terms and conditions hereof, to collaborate on the
commercialization of the Matrix and, to effectuate that collaboration, wish to
give exclusive responsibility to (a) MTF to Process (as defined herein)
quantities of the Matrix using human tissue procured by MTF and fulfill orders
for the Matrix submitted to MTF and (b) Orthofix to market the
Matrix;

     

    WHEREAS, in furtherance of the
foregoing, the Parties wish, subject to the terms and conditions hereof, to
specify which of them will be responsible financially and otherwise for each
type of activity related to the commercialization of the Matrix during the Term
(as defined herein) and the manner in which the Parties will allocate the
Service Fees (as defined herein) resulting from transfers of the Matrix during
the Term;

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

     

    WHEREAS, subject to the terms
and conditions hereof (a) MTF wishes to grant to Orthofix certain rights
with respect to the Existing MTF Technology and with respect to MTF’s joint
ownership interest in the Developed Technology, and (b) Orthofix wishes to
grant to MTF certain rights with respect to the Existing Orthofix Technology and
with respect to Orthofix’s joint ownership interest in the Developed Technology;
and

     

    WHEREAS, this Agreement will
become effective on the Effective Date.

     

    NOW, THEREFORE, in consideration of the
foregoing premises and mutual covenants and promises set forth herein, the
Parties agree as follows:

     

    ARTICLE
I

    DEFINITIONS

     

    Capitalized
terms used herein which are not otherwise defined in the text of this Agreement
will have the respective meanings assigned thereto in Addendum I attached
hereto and incorporated herein by reference, for all purposes of this Agreement
(such definitions to be equally applicable to both the singular and the plural
forms of the terms defined).  Whenever the context may require, any
pronoun will include the corresponding masculine, feminine and neuter
forms.

     

    ARTICLE
II

    SUPPLY
OF MATRIX; APPOINTMENT; FORECASTS; ORDERS; ETC.

     

    
      	
               
      

            	
              2.1

            	
              Supply
      of Matrix.

            

    

     

    (a)           Supply and Distribution of
Matrix.  Subject to the provisions of this Agreement and during
the Term hereof, Orthofix agrees to use Reasonable Commercial Efforts to market
the Matrix and achieve maximum orders therefor, and will have the right to
solicit and place with MTF orders for the Matrix (such orders conforming to the
provisions of this Agreement, together with any orders placed directly with MTF
by Customers and accepted by MTF, collectively referred to herein as the “Authorized Orders”);
and, subject to the provisions of this Agreement and during the Term hereof, MTF
agrees to use Reasonable Commercial Efforts to Process, supply and distribute
the Matrix.  In exchange for MTF’s supply and distribution of the
Matrix pursuant to and in accordance with Authorized Orders, MTF will be
entitled to the Service Fee established in accordance with Section 4.1 for each
delivery of the Matrix and to retain the Service Fee it collects for each
transaction less the Marketing Fee payable to Orthofix.

     

     

    
      

    

    
      
        [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

      

    

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

     

    (b)           Obligation to
Supply.  Each calendar
quarter, MTF will use Reasonable Commercial Efforts to Process, supply and
distribute to the recipients identified in the Authorized Orders (the “Customers”) such
quantities of the Matrix for which Orthofix solicits orders pursuant to the
provisions of this Agreement up to the quantity forecasted for such calendar
quarter in the most recent Forecast.  MTF will use good faith efforts
to Process, supply and distribute to the Customers any quantities of the Matrix
for which Orthofix solicits orders pursuant to the provisions of this Agreement,
to the extent that such quantities cause total quantities of orders solicited by
Orthofix during a calendar quarter to exceed the quantity forecasted for such
calendar quarter in the most recent Forecast.  Notwithstanding any
provision to the contrary contained in this Agreement, the Parties acknowledge
that Orthofix will not be construed as a Customer hereunder and will not
purchase Matrix for its own account or for redelivery.  If MTF
determines that it is reasonably likely to default in any material respect in
its obligation above to deliver such quantities of Matrix in accordance with the
terms of this Agreement as called for in any Authorized Order for any calendar
quarter, (i) MTF will give Orthofix prompt written notice describing such
circumstances, together with a proposed course of action to remedy such failure,
including if applicable, any actions described in the Contingency Plan, and (ii)
the Steering Committee will determine the priority in which MTF will fulfill
Authorized Orders, subject to MTF’s obligations under its agreements with Third
Parties.

     

    (c)           Exclusive
Arrangement.  During the Term (i) MTF may not Process, supply
or distribute the Matrix to or on behalf of any Third Party, other than a
Customer, (ii) Orthofix may not market or solicit orders for the Matrix
except in accordance with ARTICLE V, and (iii)
Orthofix may not Process, supply or distribute the Matrix, or procure the
Processing, supply or distribution of the Matrix, except pursuant to the
provisions of this Agreement with respect to the Collaboration.

     

    (d)           Supply.  Beginning on the
Effective Date and at the beginning of each calendar quarter thereafter through
the end of the Term, MTF will use Reasonable Commercial Efforts: (x) to maintain
in inventory a commercially-saleable quantity of the Matrix that is sufficient
to satisfy [*] percent ([*]%) of [*] ([*]) days of Orthofix’s requirements for
the Matrix for such calendar quarter as identified in the Forecast submitted by
Orthofix for such calendar quarter; and (y) throughout each calendar quarter
during the Term, to Process, on a daily basis, sufficient commercially-saleable
quantities of the Matrix to enable timely fulfillment of Orthofix’s requirements
for the Matrix for the remaining periods covered by such Forecast.

     

    (e)           Failure to
Supply.  If at any time
MTF is unable, as a result of the circumstances contemplated by the Contingency
Plan, in any material respect to fulfill Authorized Orders for the Matrix
solicited by Orthofix in accordance with the provisions of this Agreement which
do not cause the total quantities of the Matrix for which Orthofix solicits
orders pursuant to the provisions of this Agreement during a calendar quarter to
exceed the Forecast for such calendar quarter, MTF will be obligated to
implement the Contingency Plan to remedy such failure.  If MTF is
unable to fulfill Authorized Orders for the Matrix solicited by Orthofix in
accordance with the provisions of this Agreement sufficient to meet the Forecast
for a period of two (2) consecutive calendar quarters, then Orthofix may elect,
by written notice to MTF, to have all Authorized Orders for the Matrix solicited
by Orthofix fulfilled by an alternative source of supply pursuant to those
standards contained in this Agreement relevant to the Processing and supply of
the Matrix, applied mutatis mutandis; provided,
however, that upon MTF’s demonstration to Orthofix that it is in compliance with
Section 2.1(d)
and is able to fulfill Authorized Orders in the amount of Orthofix’s Forecast
for the then-current calendar quarter, Orthofix will use Reasonable Commercial
Efforts to transition fulfillment of Authorized Orders to MTF as promptly as
practicable after such demonstration.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    2.2           Forecasts.  The
Parties acknowledge and agree that the collection of Donor Tissue involves
significant procurement lead times and the Parties will cooperate in a mutual
effort to predict demand for the Matrix in order to maintain high levels of
fulfillment to Customers.  Orthofix will submit to MTF no later than
the fifteenth (15th) day
of the month preceding the start of every calendar quarter (i.e., December 15,
March 15, June 15, and September 15) during the Term, a rolling forecast (a
“Forecast”)
setting forth orders that Orthofix reasonably believes will be solicited by
Orthofix during the four (4) calendar quarters commencing with the beginning of
the subsequent calendar quarter.  Each Forecast will amend the prior
forecasts for periods covered by the new Forecast.  Orthofix will make
all Forecasts in good faith given market and other information available to
Orthofix; provided, however, under no
circumstances whatsoever will any Forecasts made hereunder be deemed to be an
order for the production of the Matrix or otherwise binding on Orthofix or its
Affiliates.  The Forecast (and each modification thereof) will be
subject to approval by the Steering Committee.

     

    2.3           Orders;
Fulfillment.  Each order solicited by Orthofix shall be subject
to acceptance in accordance with the MTF’s customary order acceptance procedures
with respect to the Matrix, which as currently in effect are set forth in Exhibit A attached
hereto and incorporated herein by reference and are subject to change from time
to time by MTF; it being acknowledged and agreed that MTF may reject any order
in the event of reasonable concerns regarding the creditworthiness of the
proposed Customer and the ability of the proposed Customer to pay the Service
Fee related to such order.  Any and all orders subject to MTF’s
standard terms and conditions, including, without limitation, its standard
warranty, with respect to the Matrix.  MTF will use Reasonable
Commercial Efforts to supply and deliver the Matrix in accordance with Section 2.1(b) on the
delivery dates specified in such Authorized Order, subject to a minimum
lead-time of 45 days to fill such Authorized Order assuming donor availability,
unless otherwise mutually agreed in writing by MTF and such
Customer.  MTF will use good faith efforts to meet any request of
Customers for delivery of Matrix in inventory in less than 7 days, and further,
MTF will attempt to accommodate any changes requested by any Customer in
delivery schedules for the Matrix following MTF’s receipt of Authorized Orders
from such Customer.  MTF will provide to Orthofix copies of any
Authorized Orders sent directly to MTF by Customers, promptly after the receipt
thereof by MTF.  MTF will not be entitled to accept any orders for the
Matrix other than Authorized Orders.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    2.4           Packaging, Delivery and Shipping
Terms.  MTF will use Reasonable Commercial Efforts to package
and label all Matrix for shipment as determined by Orthofix subject to the
immediately succeeding sentence. Orthofix will determine all trademarks,
branding, marketing, packaging and labeling to be used in connection with the
Matrix; provided, however, that MTF
will have the right to consent to all packaging and labeling, which consent will
not be unreasonably withheld, conditioned or delayed so long as such packaging
and labeling is in compliance with applicable Laws and the Specifications and
includes a prominent reference in form approved by MTF and reasonably acceptable
to Orthofix that the Matrix is supplied by MTF.  Each Party will
provide the other Party with at least thirty (30) days prior written notice of
any packaging or labeling changes (including brand names) for approval as
aforesaid, and MTF will be entitled to recover, and Orthofix will be responsible
to pay to MTF, all reasonable out-of-pocket costs that MTF incurs associated
with any packaging and labeling change requested by Orthofix; provided, further, that, after
receipt of any change notice from Orthofix, MTF will use Reasonable Commercial
Efforts to minimize such costs.  Each shipment of the Matrix will have
a unique identification number that identifies the Lot.

     

    2.5           Materials and
Components.  MTF will use Reasonable Commercial Efforts to
provide, at its cost and expense, all materials, including Donor Tissue,
equipment, machinery, facilities, components, and other resources required in
connection with Processing of the Matrix hereunder.  MTF agrees that
it will conduct audits of its suppliers of materials, including Donor Tissue,
and components of the Matrix hereunder on such basis as MTF may reasonably
determine to monitor whether such suppliers are producing the materials and
components in accordance with all applicable Laws and to determine whether such
suppliers will continue to be able to supply a sufficient quantity and quality
of such materials and components.

     

    2.6           Billing and
Collection.  MTF will submit invoices in its customary form for
each shipment of the Matrix to the Customer simultaneously with
shipment.  Customers will be required to remit the total amount of
Service Fees identified in such invoice within thirty (30) days of the invoice
date.  In the event any such Customer fails to pay the Service Fee in
accordance with this Section 2.6, MTF may,
in addition to any other remedies available to it, assess interest on all unpaid
amounts.  MTF will use Reasonable Commercial Efforts to timely collect
all Service Fees.

     

    2.7           Customer
Support.  MTF will be primarily responsible for providing
prompt pre- and post-distribution service for the Matrix.  MTF will
use Reasonable Commercial Efforts timely to respond to general questions from
Customers, recipients of the Matrix pursuant to Authorized Orders and any
physician user or similar clinical personnel user of the Matrix concerning the
Matrix, and assist such Persons in the diagnosis and correction of problems
encountered in connection with the Matrix.  Each of the Parties will:
(a) conduct the Collaboration in a manner that reflects favorably at all times
on the Matrix and the good name, good will and reputation of each of MTF and
Orthofix; (b) avoid deceptive, misleading or unethical practices that are
or might be detrimental to Orthofix, MTF, the Matrix or the public;
(c) make no false or misleading representations with regard to Orthofix,
MTF or the Matrix; (d) make no representations, warranties or guarantees to
Customers or recipients of the Matrix pursuant to Authorized Orders with respect
to the Specifications, features or capabilities of the Matrix that are
inconsistent with the mutually agreed-upon literature and other marketing
materials distributed by Orthofix or that are otherwise prohibited by this
Agreement; and (e) not enter into any contract or engage in any practice
detrimental to the interests of Orthofix, MTF or the Matrix.

     

    
       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

     

    2.8           Marketing
Support.  MTF will provide such support of Orthofix’s marketing
activities during the Term as Orthofix may reasonably request from time to
time.  MTF will use Reasonable Commercial Efforts to answer promptly
queries concerning the Matrix or use of the Matrix which Orthofix may submit to
MTF in connection with Orthofix’s marketing activities under this
Agreement.

     

    2.9           Subcontracting.  Each Party has
the right, exercisable in its sole discretion, to subcontract or delegate any of
its responsibilities under this Agreement without the prior written consent of
the other Party.  Each Party’s subcontractors will be subject to
confidentiality obligations at least as stringent as provided in this
Agreement.  All Improvements discovered, made or conceived by each
subcontractor in the course of performance of such activities will be assigned
to the Subcontracting Party and will be deemed to be Developed Technology for
purposes of this Agreement.  Notwithstanding any subcontract
hereunder, each Party will be responsible, and will remain liable, for the
performance of all of its obligations under this Agreement and for any breach
thereof by any of its subcontractors and by any further subcontractor of any of
its subcontractors.

     

    ARTICLE
III

    STEERING
COMMITTEE

     

    3.1           Membership.  Contemporaneously
with the execution and delivery of this Agreement, the Parties will establish,
and will maintain throughout the Term, a Steering Committee consisting of an
even number of members agreed upon by the Parties, an equal number of whom will
be designated by each Party and act as its representatives, to supervise and
manage the activities of the Parties under this Agreement and the Collaboration,
subject to the provisions of this Agreement.  Steering Committee
representatives of each Party will, individually or collectively, have expertise
and/or responsibility to such Party in business and/or tissue
development.  Subject to the obligation to use good-faith efforts to
preserve the continuity of Steering Committee membership, each Party may replace
any or all of its representatives on the Steering Committee at any time upon
written notice to the other Party, and any member of the Steering Committee may
designate a substitute to attend and perform the functions of that member at any
meeting of the Steering Committee.  The initial members of the
Steering Committee are identified in Exhibit B attached
hereto.  With the prior written consent of the Steering Committee in
each case, a representative of a Party on the Steering Committee may invite one
or more non-members (subject to the confidentiality provisions set forth in
ARTICLE XVI) as
deemed necessary to help explore and consider matters before the Steering
Committee.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    3.2           Meetings. The Steering
Committee will meet on a monthly basis, in person, or via telephone or video
conference, and more frequently as the Steering Committee deems appropriate, on
such dates, and at such places and times, as the Steering Committee
determines.  Meetings of the Steering Committee that are held in
person will alternate between the offices of the Parties, or such other place as
the Steering Committee may determine. The members of the Steering Committee also
may convene or be polled or consulted from time to time by means of
telecommunications, videoconferences, electronic mail or other correspondence,
as deemed necessary or appropriate and as the Steering Committee may
determine.

     

    3.3           Authority. The Steering
Committee is authorized to take the following actions:

     

    (a)           facilitate
the Parties’ exchange of information to be provided under this Agreement
concerning the overall strategy and progress of the Collaboration;

     

    (b)           ensure
open communication between the Parties as related to the Collaboration and as
provided under this Agreement;

     

    (c)           approve
the Forecasts and any changes thereto;

     

    (d)           determine
any priorities in fulfilling Authorized Orders in the circumstances described
under the last sentence of Section 2.1(b)
hereof; and

     

    (e)           subject
to the terms and provisions of this Agreement, resolve any other issues and
questions that may arise under this Agreement that are expressly assigned to the
Steering Committee by the terms hereof or by the mutual agreement of the
Parties.

     

    For
avoidance of doubt, the Steering Committee will not have the power to amend or
waive compliance with this Agreement.

     

    3.4           Actions.  The
Steering Committee will operate by consensus, and the representatives of each
Party will have a single collective vote.  If the Steering Committee
cannot reach consensus on any matter by the end of the meeting immediately
following the meeting during which the Steering Committee first attempted to
reach consensus on such matter, the matter will be escalated promptly to the
Chief Executive Officer of MTF and the Chief Executive Officer of Orthofix for
resolution pursuant to the dispute resolution procedure set forth in ARTICLE
XIX.

     

    3.5           Expenses.
Each Party will be responsible for all travel and related costs and expenses for
its members and approved invitees to attend meetings of, and otherwise
participate on, the Steering Committee.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
IV

    SERVICE
FEE; AUDIT

     

    4.1           Service
Fee.

     

    (a)           Service
Fee.  Orthofix will, in compliance with all applicable Laws,
propose the service fees for Processing, marketing and sale of the Matrix
pursuant to an Authorized Order (a “Service Fee”) at
least annually at the beginning of each calendar year or as market conditions
warrant, which shall in each instance be subject to concurrence by MTF in its
reasonable discretion.  Notwithstanding anything in this Agreement to
the contrary, MTF will be entitled to retain, after payment of applicable
Marketing Fees to Orthofix pursuant to Section 5.2, the
remainder of the Service Fee which in no event will (unless otherwise agreed
upon by the Parties) equate to less than $[*] per cc of the Matrix (the “Minimum Service
Fee”); provided, however, that such
Minimum Service Fee will, unless otherwise agreed upon by the Parties, be
increased annually by a percentage equal to the percentage increase in the CPI
over the measurement period, and provided, further, that in the
event of an increase in actual costs of Processing, supplying and distributing
the Matrix demonstrated by MTF or a change in market conditions demonstrated by
Orthofix such that continued Processing and Commercialization of the Matrix at
the Service Fee and the Marketing Fee, as the same are calculated in accordance
with this ARTICLE
IV, is no longer commercially reasonable, the Parties will meet promptly
to negotiate in good faith for purposes of adjusting the Service Fee and the
Marketing Fee in order to maintain the commercial viability of the
Matrix.  Any adjustment of the Service Fee will become effective as of
the first day of calendar year, if applicable, or as otherwise agreed upon by
the Parties.

     

    (b)           Statements.  Within
fifteen (15) days after the end of each calendar month, MTF will provide to
Orthofix a written statement (the “Monthly Statement”)
which sets forth (i) all Service Fees invoiced for such month pursuant to
Authorized Orders, (ii) all Service Fees received by MTF during such month for
the supply and distribution of the Matrix pursuant to Authorized Orders, (iii)
the Marketing Fee payable to Orthofix for such month calculated in accordance
with Section
5.2, (iv) all Service Fees that have been invoiced and not timely paid as
of the end of such month and (v) a list of all Authorized Orders received during
such month, including the name of the Customer identified in each such
Authorized Order and the quantity of the Matrix ordered pursuant to each such
Authorized Order.

     

    4.2           Service
Fee Audit.

     

    (a)           Performance of Service Fee
Audits.  MTF will maintain complete and accurate books and
records of all Service Fees as a result of Authorized Orders in accordance with
generally accepted accounting principles consistently applied during the Term
and for at least two (2) years thereafter.  Orthofix will have the
right, not more frequently than one (1) time in any calendar year, during normal
business hours upon not less than five (5) days’ prior written notice to MTF, to
examine and copy such books and records for the purpose of verifying MTF’s
compliance with the terms and conditions of Section
5.2.  The expenses of such Audits will be borne by Orthofix;
provided, however, that MTF
will be charged for the reasonable expense of any such Audit that establishes an
underpayment by five percent (5%) or more of the amounts owed to Orthofix during
the audited period.   Within thirty (30) days of completing the
results of any Audit hereunder, Orthofix will submit to MTF a written report
outlining its findings and/or observations from any such
Audit.  Orthofix will provide MTF a written notice identifying any
claimed underpayment of Marketing Fees (the “Underpayment Notice”)
to Orthofix as a result of such Audit.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

     

    (b)           Audit Feedback
Dispute.  If MTF objects in good faith to any allegation of
underpayment of the Marketing Fees identified in an Underpayment Notice, MTF
will provide Orthofix with written notice of such dispute (the “Dispute Notice”)
within thirty (30) days after MTF’s receipt of the Underpayment
Notice.  The Dispute Notice will set forth in reasonable detail the
basis for such disagreement described therein.  Thereafter, Orthofix
and MTF will attempt in good faith to resolve any such dispute as promptly as
practicable in accordance with the provisions of ARTICLE
XIX.  Upon expiration of the thirty (30) day period after
delivery of the Underpayment Notice, if no Dispute Notice will have been
delivered, or within ten (10) days after the resolution of any disputed items in
any Dispute Notice, as the case may be, any payment required by MTF pursuant to
this Section
4.2 will be made by wire transfer of immediately available funds to an
account designated by Orthofix.  Orthofix may assess interest at a
rate of one percent (1%) per month on all unpaid amounts required under this
Section
4.2.

     

    (c)           Acknowledgement.  Orthofix’s
and/or Orthofix’s representatives’ exercise of the Audit and inspection rights
hereunder will in no way waive, modify or diminish MTF’s obligations under this
Agreement or limit any other remedy Orthofix has under this
Agreement.

     

    ARTICLE
V

    MARKETING
OBLIGATIONS; MARKETING FEE

     

    5.1           Marketing
Obligations.  Subject to the terms and conditions of this
Agreement, during the Term Orthofix will serve as an exclusive marketing
representative with authority to market and solicit orders for the Matrix in the
Territory.  Subject to the terms and conditions of this Agreement, all
marketing activities for the Matrix during the Term will be the sole
responsibility of Orthofix.  Orthofix will prepare and submit to MTF
an annual marketing plan for the Matrix (the “Marketing Plan”),
consistent with the provisions hereof, for review and approval by MTF (which
approval MTF will not unreasonably withhold, condition or
delay).  Orthofix will also submit to MTF for review and approval
(which approval MTF will not unreasonably withhold, condition or delay) all
marketing and promotional materials, consistent with the provisions hereof, that
Orthofix intends to utilize for its marketing activities related to the
Matrix.  Orthofix will not deviate from or provide information
inconsistent with any of the marketing and promotional materials to any
Customers or potential Customers or otherwise make representations to such
Persons not previously approved by MTF.  Orthofix will use
Commercially Reasonable Efforts to market the Matrix in accordance with the
Marketing Plan; provided, however, that
Orthofix will be entitled to amend the terms of the Marketing Plan from time to
time, consistent with the provisions hereof, subject to MTF’s approval which
approval MTF will not unreasonably withhold, condition or delay.  All
Authorized Orders for the Matrix solicited by Orthofix or its permitted
designees will be placed in accordance with MTF’s customary procedures with
respect to the Matrix.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    5.2           Marketing Fee.  As
compensation for services performed hereunder, Orthofix will be entitled to
receive a monthly fee (a “Marketing Fee”) equal
to [*] percent ([*]%) of the total amount of Service Fees received by MTF during
the previous calendar month pursuant to Authorized Orders, subject in each case
to MTF’s right to receive the Minimum Service Fee.  The Marketing Fee
for each month will be payable together with the delivery of the Monthly
Statement for that month.  In the event that MTF fails to pay the
Marketing Fee shown on any Monthly Statement in accordance with this Section 5.2,
Orthofix may, in addition to any other remedies available to it, assess interest
at a rate of one percent (1%) per month on all such unpaid
amounts.  All payments due hereunder to Orthofix will be made in
arrears in United States Dollars by wire transfer of immediately available funds
to an account designated by Orthofix in writing to MTF.

     

    ARTICLE
VI

    FUTURE
INITIATIVES

     

    6.1           Future Development. From time
to time during the Term, the Parties will, without limiting any other term or
provision of this Agreement, endeavor to identify new development initiatives,
including but not limited to line extensions, enhancements and improvements to
the Matrix (other than changes to the Specifications that may be agreed upon by
the Steering Committee for development under this Agreement), and if mutually
agreed upon by the Parties, will negotiate in good faith for purposes of
entering into development agreements with respect to any such
initiatives.

     

    6.2           Rights
of First Offer and First Refusal.

     

    (a)           First
Offer.  If a concept for a [*] (a “Product Concept”), is
developed by either Party, at any time during the Term, the Party developing
such concept (the “Offering Party”) will
communicate such concept to the other Party (the “Offeree Party”) in
reasonable detail (the “First Offer Notice”)
and will offer to the Offeree Party for a period of thirty (30) days from the
date of the First Offer Notice a right-of-first offer to collaborate in the
development and commercialization of such Product Concept in accordance with
such terms as may be mutually agreed upon by the Parties.  The Offeree
Party will, within such thirty (30) days from receipt of the First Offer Notice,
advise the Offering Party that it is not interested in the Product Concept or
submit to the Offering Party its proposal for the development and
commercialization of the Product Concept (the “Product Concept
Proposal”).  In the event that the Product Concept Proposal
submitted is unacceptable, in whole or in part, to the Offering Party, the
Parties will negotiate in good faith to resolve the outstanding
issues.  In the event that the Parties fail to reach a mutual
agreement upon a definitive agreement regarding development and
commercialization of the Product Concept within one hundred twenty (120) days
from receipt of the First Offer Notice, the offer will be deemed to have been
rejected, and the Offering Party will be entitled, free from the restrictions of
this Section
6.2(a) and Section 16.2 hereof,
to develop and commercialize the Product Concept independently or, subject to
the provisions of Section 6.2(b), with
one or more Third Parties.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

    (b)           First
Refusal.  Prior to entering into one or more agreements with
one or more Third Parties, at any time during the Term, for development and/or
commercialization of a Product Concept of the type required to be submitted by
it to the other Party pursuant to Section 6.2(a),
either Party (the “Proposing Party”)
will communicate to the other Party (the “Receiving Party”) in
writing the identity of the Third Party or Third Parties with which the
Proposing Party proposes to enter into the agreement(s), any other relevant
materials provided by the Third Party or Third Parties, and the terms of the
proposed agreement(s) (a “First Refusal
Notice”) and will grant to the Receiving Party for a period of thirty
(30) days from the date of the First Refusal Notice a right-of-first refusal to
develop and/or commercialize such Product Concept on terms which are
substantially the same as those terms in the proposed
agreement(s).  The Receiving Party will, within such thirty (30) days
from receipt of the First Refusal Notice from the Proposing Party, advise the
Proposing Party that it is not interested in the Product Concept or submit to
the Proposing Party notice of its exercise of the right-of-first refusal and
confirm the terms thereof consistent with the foregoing.  In the event
that the Receiving Party does not accept the offer in writing within the
prescribed thirty (30) day period, the Proposing Party will be entitled, for a
period expiring one hundred twenty (120) days after the termination of such
thirty-day period, free from the restrictions of this ARTICLE VI and Section 16.2 hereof,
to enter into the proposed agreement(s) with the proposed Third Party or Third
Parties.  In the event of any material change(s) to the terms of the
proposed agreement(s) or any change in the identity of the Third Party or Third
Parties with which the Proposing Party proposes to enter into the proposed
agreement(s), or in the event that the Proposing Party and the identified Third
Party or Third Parties have not entered into the proposed agreement(s) prior to
the expiration of the one hundred twenty (120) day period as aforesaid, the
Receiving Party will, if during the Term, again have a right-of-first refusal
with respect to such Product Concept in accordance with the terms of this Section
6.2(b).

     

    (c)           No
Waiver.  Either Party’s failure to exercise the right-of-first
offer under Section
6.2(a) will not result in a waiver of such Party’s right-of-first refusal
under Section 6.2(b)
and either Party’s failure to exercise the rights-of-first offer and
-first refusal contained in this Section 6.2 for any
Product Concept will not result in a waiver of either right with respect to any
other Product Concept.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
VII

    INTELLECTUAL
PROPERTY

     

    7.1           Existing
Technology.

     

    (a)           Existing MTF
Technology.  MTF will retain sole and exclusive ownership of
all right, title and interest in and to: (x) all of the Existing MTF Technology
(subject only to its express license to Orthofix set forth hereunder); and (y)
if and to the extent not otherwise provided under this Agreement or the
Development Agreement, any and all improvements, enhancements, modifications,
purifications, optimizations or further development of or to the Existing MTF
Technology. MTF hereby grants to Orthofix (i) a non-exclusive, worldwide,
royalty-free license, together with the right to sublicense, during the Term,
under such Existing MTF Technology, to exercise any of Orthofix’s privileges and
to perform any of Orthofix’s obligations under this Agreement in connection with
the Collaboration, and to perform any of MTF’s obligations under this Agreement
in the event that MTF fails to fulfill its obligations under this Agreement, and
(ii) a non-exclusive, perpetual, irrevocable, worldwide, royalty-free license,
together with the right to sublicense, under such Existing MTF Technology,
solely insofar as is necessary to apply the Developed Technology to make, use,
sell, offer to sell and import bone-growth allograft products containing viable
allogeneic stem cells derived from cadavers, which grant will be exercised by
Orthofix only on and after any expiration of this Agreement or any termination
of this Agreement (x) pursuant to Section 13.4 or (y)
by Orthofix pursuant to Section 13.2 and a
determination in a final non-appealable decision by a court of competent
jurisdiction that MTF has committed, and failed to cure within the permitted
cure period, a material breach or material default under this
Agreement.

     

    (b)           Existing Orthofix
Technology.  Orthofix will retain sole and exclusive ownership
of all right, title and interest in and to: (x) all of the Existing Orthofix
Technology (subject only to its express license to MTF set forth hereunder); and
(y) if and to the extent not otherwise provided under this Agreement or the
Development Agreement, to any and all improvements, enhancements, modifications,
optimizations or further developments of or to the Existing Orthofix
Technology.  Orthofix hereby grants to MTF (i) a non-exclusive,
worldwide, royalty-free license, together with the right to sublicense, during
the Term, under such Existing Orthofix Technology, to exercise any of MTF’s
privileges and perform any of MTF’s obligations under this Agreement in
connection with the Collaboration, and (ii) a non-exclusive, perpetual,
irrevocable, worldwide, royalty-free license, together with the right to
sublicense, under such Existing Orthofix Technology, solely insofar as in
necessary to apply the Developed Technology to make, use, sell, offer to sell
and import bone-growth allograft products containing viable allogeneic stem
cells derived from cadavers, which grant will be exercised by MTF only on and
after any expiration of this Agreement or any termination of this Agreement (x)
pursuant to Section
13.4 or (y) by MTF pursuant to Section 13.2 and a
determination in a final non-appealable decision by a court of competent
jurisdiction that Orthofix has committed, and failed to cure within the
permitted cure period, a material breach or material default under this
Agreement.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

     

    7.2           Developed
Technology.

     

    (a)           Developed
Technology.  Orthofix and MTF will jointly own any and all
Developed Technology.  In furtherance of the foregoing, each Party
hereby assigns and agrees to assign to the other Party an undivided joint
ownership interest in and to all right, title and interest in all Developed
Technology, including all intellectual property rights therein, whether
developed solely by such Party or its employees, agents or subcontractors, or
whether developed jointly by the Parties, their employees, agents or
subcontractors under this Agreement.  Each Party will, upon request by
the other Party, execute specific assignments and take any action necessary to
enable the other Party to secure its joint ownership interest in the Developed
Technology or any component thereof.  By virtue of their joint
ownership, MTF and Orthofix will each enjoy, without limitation, the right to
apply the Developed Technology to offer to sell the Matrix and perform services
related to the Matrix in accordance with this Agreement, and the right to
license such right, during the Term.  By virtue of its joint ownership
interest, MTF will enjoy, without limitation, the right to apply the Developed
Technology to make, use, sell and import the Matrix and perform services related
to the Matrix in accordance with this Agreement, and the right to license such
right, during the Term.  Except for purposes of exercising its
privileges and performing its obligations under this Agreement in connection
with the Collaboration, Orthofix will not exercise or license its right to apply
the Developed Technology for purposes of making, using, selling or importing the
Matrix during the Term.  For the avoidance of doubt, the Parties
acknowledge and agree that all right, title and interest in and to any
improvements, enhancements, modifications, purifications, optimizations or
further developments of or to the Developed Technology not constituting
Improvements hereunder will be owned solely and exclusively by the Party
responsible for the discovery, creation or conception thereof.

     

    (b)           Conditional Exclusive
License Grants.

     

    (i)           MTF
hereby grants to Orthofix, which grant will be exercised by Orthofix only in the
event of any termination of this Agreement by Orthofix pursuant to Section 13.2 and
a determination in a final, non-appealable decision by a court of competent
jurisdiction that MTF has committed, and failed to cure within the permitted
cure period, a material breach or material default under this Agreement, an
exclusive, perpetual, irrevocable, worldwide, royalty-free license, with the
right to sublicense, under MTF’s undivided joint ownership interest in the
Developed Technology to make, use, sell, offer to sell and import the
Matrix.

     

    (ii)           Orthofix
hereby grants to MTF, which grant will be exercised by MTF only in the event of
any termination of this Agreement by MTF pursuant to Section 13.2 and
a determination in a final, non-appealable decision by a court of competent
jurisdiction that Orthofix has committed, and failed to cure within the
permitted cure period, a material breach or material default under this
Agreement, an exclusive, perpetual, irrevocable, worldwide, royalty-free
license, with the right to sublicense, under Orthofix’s undivided joint
ownership interest in the Developed Technology to make, use, sell, offer to sell
and import the Matrix.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

     

    (c)           Disclosures of Developed
Technology.  Each Party will make a complete and prompt written
disclosure to the other Party hereto specifically detailing the features and
concepts of any and all ideas, designs, discoveries, inventions, improvements,
and, in general, all things encompassed within the Developed Technology that are
conceived of, reduced to practice, or otherwise developed, solely or jointly by
such Party and/or Persons working under such Party’s direction
and/or Persons employed or engaged by such Party during the Term and
in performance of the activities under this Agreement.  Each Party will
require each Person employed or engaged by such Party in connection with the
performance of the activities under this Agreement to enter into a written
agreement pursuant to which such Person (i) agrees to disclose to such
Party promptly in writing all such ideas, designs, discoveries, inventions,
improvements, and, in general, all things encompassed within the Developed
Technology, and (ii) assigns to such Party all such ideas, designs,
discoveries, inventions, improvements and all intellectual property rights
therein, and, in general, all things encompassed within the Developed
Technology.

     

    7.3           Trademark
Licenses.

     

    (a)           MTF
Marks.  MTF hereby grants to Orthofix, during the Term, a
non-exclusive, worldwide license, to use and apply the trademark “MTF” and any
and all other related trademarks, logos, service marks, slogans and taglines
designated by MTF in writing from time to time (the “MTF Marks”) in
connection with Orthofix’s promotion and marketing of the Matrix in the
Territory, in accordance with the terms of this Agreement.  Any such
use in or on labels, packages, advertisements, pamphlets or other graphic or
aural materials or otherwise hereunder will require prior written approval from
MTF, and will in each instance indicate that the MTF Mark belongs to
MTF.  Orthofix will regularly provide to MTF samples of all intended
uses of the MTF Marks.  Orthofix will comply with all notice and
marking requirements, and all additional standards of quality control, as
required by MTF for the protection and enforcement of the MTF Marks and the
registrations thereof and will not use the MTF Marks in any manner which might
dilute or tarnish the MTF Marks or reflect adversely on MTF or any of its
Affiliates.  All goodwill associated with the use of the MTF Marks by
Orthofix will inure to the benefit of MTF.  MTF shall have no
obligation to maintain any MTF Mark and, upon notice by MTF to Orthofix to such
effect, Orthofix shall cease further use thereof.  Orthofix shall not
have the right to sublicense its rights under this Section 7.3(a) except
as otherwise provided under Section
2.9.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

     

    (b)           Orthofix
Marks.  Orthofix hereby grants to MTF, during the Term, a
non-exclusive, worldwide license, to use and apply the trademark “Orthofix” and
any and all other related trademarks, logos, service marks, slogans and taglines
designated by Orthofix in writing from time to time (the “Orthofix Marks”) in
connection with packaging, supply and distribution of the Matrix in the
Territory, in accordance with the terms of this Agreement.  Any such
use in or on labels, packages, advertisements, pamphlets or other graphic or
aural materials or otherwise hereunder will require prior written approval from
Orthofix, and will in each instance indicate that the Orthofix Mark belongs to
Orthofix.  MTF will regularly provide to Orthofix samples of all
intended uses of the Orthofix Marks.  MTF will comply with all notice
and marking requirements, and all additional standards of quality control, as
required by Orthofix for the protection and enforcement of the Orthofix Marks
and the registrations thereof and will not use the Orthofix Marks in any manner
which might dilute or tarnish the Orthofix Marks or reflect adversely on
Orthofix or any of its Affiliates.  All goodwill associated with the
use of the Orthofix Marks by MTF will inure to the benefit of
Orthofix.  Orthofix shall have no obligation to maintain any Orthofix
Mark and, upon notice by Orthofix to MTF to such effect, MTF shall cease further
use thereof.  MTF shall not have the rights to sublicense its rights
under this Section
7.3(b) except as provided under Section
2.9.

     

    7.4           Prosecution
of Intellectual Property.

     

    (a)           Existing Orthofix
Technology.  Subject to Section 7.4(d),
Orthofix will have the sole right to file, prosecute and maintain patent
applications and other registrations with respect to the Existing Orthofix
Technology.  All costs and expenses associated with the filing,
prosecution and maintenance of patent applications and other registrations with
respect to the Existing Orthofix Technology will be the responsibility of
Orthofix; provided, however, that if MTF
exercises its right to file, prosecute and maintain a patent application or
other registration with respect to the Existing Orthofix Technology as it
relates to the Matrix pursuant to Section 6.4(d),
the costs of filing, prosecuting and maintaining such patent application or
other registration will be the responsibility of MTF.

     

    (b)           Existing MTF
Technology.  Subject to Section 7.4(d), MTF
will have the sole right to file, prosecute and maintain patent applications and
other registrations with respect to the Existing MTF Technology.  All
costs and expenses associated with the filing, prosecution and maintenance of
patent applications and other registrations with respect to the Existing MTF
Technology will be the responsibility of MTF; provided, however, that if
Orthofix exercises its right to file, prosecute and maintain a patent
application or other registration with respect to the Existing MTF Technology as
it relates to the Matrix pursuant Section 7.4(d), the
costs of filing, prosecuting and maintaining such patent application or other
registration will be the responsibility of Orthofix.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

     

    (c)           Developed
Technology.  Subject to Section 7.4(d),
Orthofix will have the sole right to file, prosecute and maintain patent
applications and other registrations with respect to the Developed
Technology.  All costs and expenses associated with the filing,
prosecution and maintenance of patent applications and other registrations with
respect to the Developed Technology will be the responsibility of Orthofix;
provided, however, that if MTF
exercises its right to file, prosecute or maintain patent applications or other
registrations with respect to the Developed Technology pursuant to Section 7.4(d), the
costs of filing, prosecuting and maintaining such patent application or other
registration will be the responsibility of MTF.

     

    (d)           Election Not to File,
Prosecute or Maintain.  In the event that a Party elects not to
file, prosecute or maintain a patent application or other registration with
respect to the Existing Orthofix Technology as it relates to the Matrix or the
Existing MTF Technology  as it relates to the Matrix or with respect
to the Developed Technology (as applicable), the other Party will be entitled to
provide written notice to such Party of the other Party’s intent to file,
prosecute or maintain such patent application or other registration, and if such
Party fails to notify the other Party within thirty (30) days after such written
notice that it has commenced filing, prosecuting or maintaining such patent
application or other registration, as the case may be, the other Party will be
entitled to file, prosecute and maintain such patent application or other
registration in the owning Party’s name.

     

    (e)           Cooperation.  Without
limiting any obligation under Section 11.1, each
Party will cooperate with, and provide all reasonable aid and technical
assistance to, the other Party in obtaining any patent or other intellectual
property protection or right as it relates to the Matrix as permitted under this
Section 7.4, and
will keep all books and records, including notebooks, data, opinions, searches,
reports, notes, summaries and the like, irrespective of the form, and execute
(and require its employees, agents, consultants and contractors to execute) all
documents reasonably necessary for purposes of procuring, maintaining, enforcing
and defending such intellectual property rights.  In furtherance of
the foregoing, each Party shall, during the Term, inform the other Party at
reasonable regular intervals, or at such other Party’s reasonable request, about
the status of any patent application, patent or other registration as it relates
to the Matrix.

     

    7.5           Enforcement
of Intellectual Property.

     

    (a)           Notification of Third-Party
Infringement.  Each Party will notify the other Party promptly
in writing in the event that any information is brought to its attention
regarding any potential infringement by a Third Party of (i) the Existing MTF
Technology or the Existing Orthofix Technology, in each case, insofar as
relating to the uses licensed hereunder, (ii) the MTF Marks or the Orthofix
Marks, in each case, insofar as relating to the uses licensed hereunder, and/or
(iii) the Developed Technology.

     

    (b)           Existing Orthofix
Technology; Orthofix Marks.  Subject to Section 7.5(e),
Orthofix will have the sole power and discretion to enforce and exploit Existing
Orthofix Technology and Orthofix Marks against Third Parties by civil lawsuit or
licensing, and will control any enforcement action brought by it with respect to
any alleged infringement of the Existing Orthofix Technology and Orthofix
Marks.  Orthofix will bear the costs and retain any amounts received
in connection with such enforcement and exploitation actions.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    (c)           Existing MTF Technology; MTF
Marks.  Subject to Sections 7.5(d) and
(e), MTF will
have the sole power and discretion to enforce and exploit Existing MTF
Technology and MTF Marks against Third Parties by civil lawsuit or (subject to
the rights licensed hereunder) licensing, and will control any enforcement
action brought by it with respect to any alleged infringement of the Existing
MTF Technology and MTF Marks.  MTF will bear the costs and retain any
amounts received in connection with such enforcement and exploitation
actions.

     

    (d)           Developed
Technology.

     

    (i)           Subject
to the additional provisions of this Section 7.5(d) and
Section 7.5(e),
during the Term Orthofix will have the sole power and discretion to enforce and
exploit, against Third Parties that offer a product or service that competes
with the Matrix, by civil lawsuit or licensing, and will control any enforcement
action brought by it against such Third Party with respect to any alleged
infringement of, the Developed Technology or the Developed Technology in
combination with the Existing MTF Technology licensed
hereunder.  Orthofix will pay all costs and fees associated with
instituting any such action and will have control over selection of counsel and
all strategic decisions relating to the action; provided, however, that any
settlement proposed by Orthofix to be entered into will be subject to MTF’s
prior written approval (which approval MTF will not unreasonably withhold,
condition or delay).  Any amounts received in connection with such
enforcement and exploitation actions will be applied as follows:

     

    (A)           first,
to Orthofix in the amount of its costs and fees associated with instituting and
maintaining such action and,

     

    (B)           next,
to Orthofix in the amount of all costs incurred by Orthofix for filing,
prosecution and maintenance of patent applications and other registrations with
respect to the Developed Technology, and

     

    (C)           next,
to MTF in the amount of all costs incurred by MTF for filing, prosecution and
maintenance of patent applications and other registrations with respect to the
Developed Technology, and

     

    (D)           then,
[*] percent ([*]%) of any remaining amount to Orthofix and [*] ([*]%) of any
remaining amount to MTF.

     

    
       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

     

    (ii)           Subject
to the additional provisions of this Section 7.4(d) and
Section 7.4(e),
during the Term, MTF will have the sole power and discretion to enforce and
exploit, against Third Parties that offer a product or service that does not
compete with the Matrix, by civil lawsuit or licensing, and will control any
enforcement action brought by it against any such Third Party with respect to
any alleged infringement of, the Developed Technology or the Developed
Technology in combination with any Existing Orthofix Technology licensed
hereunder.  MTF will pay all costs and fees associated with
instituting any such action and will have control over selection of counsel and
all strategic decisions relating to the action; provided, however, that any
settlement proposed by MTF to be entered into will be subject to Orthofix’s
prior written approval (which approval Orthofix will not unreasonably withhold,
condition or delay).  Any amounts received in connection with such
enforcement and exploitation actions will be applied as follows:

     

    (A)           first,
to MTF in the amount of its costs and fees associated with instituting and
maintaining such action, and

     

    (B)           next,
to MTF in the amount of all costs incurred by MTF for filing, prosecution and
maintenance of patent applications and other registrations with respect to the
Developed Technology, and

     

    (C)           next,
to Orthofix in the amount of all costs incurred by Orthofix for filing,
prosecution and maintenance of patent applications and other registrations with
respect to the Developed Technology, and

     

    (D)           then,
any remaining amount to be allocated between the Parties in accordance with
their respective damages suffered as a result of the circumstances at issue in
such action.

     

    (iii)           If
either Party declines to approve a settlement of an action brought by the other
Party to enforce rights in the Developed Technology, the Party that declines to
approve the proposed settlement will be fully responsible for, all reasonable
costs and fees incurred for maintaining the enforcement action and subsequent
settlement efforts relating to the period after the date on which approval of
the proposed settlement was declined.

     

    (e)           Election Not to
Enforce.  Each Party may, from time to time, request that the
other Party take action to enforce and exploit the Existing MTF Technology or
the Existing Orthofix Technology as it relates to the Matrix or the rights
licensed hereunder or the Developed Technology (as applicable).  If
the Party with the right to enforce and exploit the Existing MTF Technology or
the Existing Orthofix Technology as it relates to the Matrix or the rights
licensed hereunder or the Developed Technology (as applicable) elects not to
enforce or exploit the applicable Existing Orthofix Technology, Existing MTF
Technology, or Developed Technology, the other Party will be entitled to provide
written notice to such Party of its intent to enforce and exploit such Existing
Orthofix Technology, Existing MTF Technology, or Developed Technology, as
applicable and, if such Party fails to notify the other Party within thirty (30)
days after such written notice that it has commenced to enforce and exploit the
same, the other Party will be entitled to enforce and exploit such Existing
Orthofix Technology, Existing MTF Technology, or Developed Technology, as
applicable, at its own expense and to retain amounts received in connection with
such enforcement and exploitation actions.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

     

    (f)           Cooperation.  The
Parties will at all times cooperate with each other, share material notices and
filings in a timely manner and be kept informed of the status of any proceeding
under Sections
7.4(b), (c), (d) or (e) with respect to
the Matrix or any rights licensed hereunder by the Party undertaking such
enforcement.  Without limiting the generality of the foregoing, each
Party will provide such reasonable cooperation and assistance as the other Party
may reasonably request in any legal action to enforce any rights subject to
Sections
7.5(b), (c), (d) or (e) with respect to
the Matrix or any rights licensed hereunder, including joining such action as a
necessary party, at the enforcing Party’s expense.

     

    ARTICLE
VIII

    REPRESENTATIONS
AND WARRANTIES OF MTF

     

    Except
for the representations and warranties in Section 8.7(a), Section 8.7(b), Section 8.7(c) and
Section 8.8,
each of which will be given for the entire Term, MTF hereby represents and
warrants to Orthofix as of the Effective Date as follows:

     

    8.1           Organization, Good Standing and
Authority.  MTF is duly formed, validly existing and in good
standing under the laws of the District of Columbia, and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required except to the extent that
such failure to qualify or maintain good standing would not materially adversely
affect its ability to perform its obligations under this Agreement.  MTF
has full corporate power and authority to own the assets owned by it and to
lease the properties and assets held by it under lease, in each case insofar as
to be applied hereunder, and to carry on and participate in the
Collaboration.

     

    8.2           Organizational and Governing
Documents; Approval.  This Agreement has been approved by all
necessary corporate action of MTF and no other corporate proceedings on the part
of MTF are necessary to authorize the execution and delivery of this Agreement,
or the consummation of the transactions contemplated hereby, under the District
of Columbia Nonprofit Corporation Act, MTF’s organizational documents or
otherwise.

     

    8.3           Due Execution and
Delivery.  MTF has all necessary power and authority to
execute, deliver and perform this Agreement.  MTF has duly executed and
delivered this Agreement and assuming the due authorization, execution and
delivery of this Agreement by Orthofix, this Agreement constitutes the legal,
valid and binding obligations of MTF enforceable against it in accordance with
its terms, except that such enforcement (a) may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting creditors’ rights generally,
and (b) is subject to the availability of equitable remedies, as determined
in the discretion of the court before which such a proceeding may be
brought.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

     

    8.4           Consents; No Conflict. Except
for the approval of MTF’s Board of Directors which has been obtained prior to
the date of this Agreement, no material consent, authorization, permit, waiver
or approval of or from, or notice to, any Person or any governmental authority
is required as a condition to the execution and delivery of this Agreement by
MTF or the performance of MTF’s obligations hereunder.  The execution
and delivery of this Agreement and the performance of MTF’s obligations
hereunder will not give rise to a right of termination of, contravene or
constitute a default under, or be an event which with the giving of notice or
passage of time or both will become a default under, or give to others any
rights of termination or cancellation of, or give rise to a right of
acceleration of the performance required by or maturity of, or result in the
creation of any lien, charge or encumbrance, claim, cost, tax, losses or loss of
any rights with respect to the Collaboration or the Matrix pursuant to any of
the terms, conditions or provisions of or under any applicable Law, MTF’s
organizational documents or any material written or oral contract or agreement
to which MTF is a party or by which its assets are bound.

     

    8.5           Litigation and
Claims.  There is no claim, suit, proceeding or other
investigation pending, or to MTF’s Knowledge, threatened against MTF that would
preclude MTF from entering into this Agreement or performing its obligations
hereunder.  MTF is not in default with respect to any order, writ,
injunction or decree of any governmental entity known to or served upon MTF in
any manner that would preclude MTF from entering into this Agreement or
performing its obligations hereunder.  There is no action or suit by MTF
and relating to the Collaboration or the Matrix that is pending, threatened or
contemplated against any other Person.

     

    8.6           Compliance With
Laws.  To MTF’s Knowledge, (a) MTF is not in material violation
of or in material default under any Law applicable to MTF with respect to the
Collaboration or the Matrix, including the PHSA and relevant sections of the
FDCA, the NOTA and 21 C.F.R. Part 1271,
Human Cells, Tissues, and Cellular or Tissue-Based Products, in each case as
currently applied by the FDA or other Regulatory Authority, (b) all material
permits have been issued or granted to MTF (i) pursuant to which MTF
currently operates or holds any interest in the property relating to the
Collaboration or the Matrix, or (ii) which are required for its
participation in the Collaboration as contemplated by this Agreement or the
holding of any such interest, and (c) all such permits are in full force and
effect and constitute all material permits required to permit MTF to participate
in the Collaboration.

     

    8.7           Authorizations;
Regulatory Compliance.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

     

    (a)           HCT/P Status.  The Matrix, as marketed in accordance with,
and within, labeling approved by MTF, will satisfy the FDA’s definition of an
HCT/P subject to regulation solely under Section 361 of the PHSA and the
provisions of 21 C.F.R. Part 1271 as currently applied by the FDA, i.e., the Matrix as so
marketed, and in such context, will be a 361 HCT/P.  The Matrix, as so
marketed, and in such context, will be minimally manipulated, intended for
homologous use, will not involve combination with another article (with certain
limited exceptions), will not have a systemic effect and is not dependent upon
the metabolic activity of living cells for its primary function in order to
satisfy the FDA’s requirements (as set forth in 21 C.F.R. 1271.10 and other
provisions in 21 C.F.R. Part 1271 as currently applied by the FDA).

     

    (b)           Lot Compliance Specifications and all applicable Laws, including the FDA’s
requirements in 21 C.F.R. Part 1271 regarding Donor Eligibility (Subpart C),
cGTP (Subpart D) and Labeling (21 C.F.R § 1271.370), in each case as currently applied by the FDA
or other Regulatory Authority.

     

    (c)           Investigation and
Reporting.  MTF will investigate and report to the applicable
Regulatory Authority adverse reaction reports and HCT/P deviations with respect
to the Matrix in accordance with the requirements of 21 C.F.R. Part 1271 Subpart
E.

     

    (d)           No Violation or
Default.  To MTF’s Knowledge, MTF is not under investigation
with respect to, has not been threatened to be charged with, nor has been given
notice of, any material violation of or material default under any Law that
could interfere with or delay the Processing and Commercialization of the Matrix
pursuant to this Agreement.

     

    (e)           No Enforcement
Actions.  In the past twelve (12) months, MTF has not received
from the FDA or any other governmental entity, any notice of adverse findings,
Form 483s, FDA warning letters, regulatory letters, notices of violations,
detentions or seizures of product, suits for injunctive relief or other
enforcement actions against MTF that could interfere with or delay in any
material respect the Processing of the Matrix pursuant to this
Agreement.

     

    8.8           Matrix
Warranties.  MTF warrants that all quantities of the Matrix
supplied pursuant to any Authorized Orders (a) will conform with the
Specifications, will be free from defects in materials or workmanship and will
not be adulterated, misbranded, contaminated, tampered with or otherwise altered
or mishandled while in the custody or control of MTF; (b) will have been
Processed, supplied and distributed in accordance with the Specifications and in
compliance in any material respect with all applicable Laws; and (c) will not be
Processed, supplied, or distributed in violation of any agreement, judgment,
order, or decree to which MTF is a party.

     

    8.9           Intellectual
Property.  The Existing MTF Technology licensed under this
Agreement is Controlled by MTF, and is free and clear of any liens, charges and
encumbrances created by MTF.  MTF is not aware of any infringement of
a valid claim of an existing Patent, or any other intellectual property right in
connection with the Existing MTF Technology licensed under this Agreement, and
has disclosed to Orthofix all reasonably relevant information regarding the
Existing MTF Technology licensed under this Agreement, including all patent
opinions obtained by MTF related thereto.  To MTF’s Knowledge, no
Patent included in the Existing MTF Technology licensed under this Agreement is
invalid or unenforceable, in whole or in part.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

     

    8.10           Disclaimer of
Warranties.  EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE VIII, MTF
MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, IN FACT
OR BY OPERATION OF LAW, AND MTF DISCLAIMS, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

     

    ARTICLE
IX

    REPRESENTATIONS
AND WARRANTIES OF ORTHOFIX

     

    Orthofix
hereby represents and warrants to MTF as of the Effective Date as
follows:

     

    9.1           Organization, Good Standing and
Authority.  Orthofix is duly formed, validly existing and in
good standing under the laws of the State of Delaware, and is duly qualified as
a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required except to the extent that
such failure to qualify or maintain good standing would not materially adversely
affect its ability to perform its obligations under this Agreement. 
Orthofix has full corporate power and authority to own the assets owned by it
and to lease the properties and assets held by it under lease, in each case
insofar as to be applied hereunder, and to carry on and participate in the
Collaboration.

     

    9.2           Organizational and Governing
Documents; Approval. This Agreement has been approved by all necessary
corporate action of Orthofix and no other corporate proceedings on the part of
Orthofix are necessary to authorize the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby under the Delaware
General Corporation Law, Orthofix’s organizational documents or
otherwise.

     

    9.3           Due Execution and
Delivery.  Orthofix has all necessary power and authority to
execute, deliver and perform this Agreement.  Orthofix has duly executed
and delivered this Agreement and assuming the due authorization, execution and
delivery of this Agreement by MTF, this Agreement constitutes the legal, valid
and binding obligations of Orthofix enforceable against it in accordance with
its terms, except that such enforcement (a) may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting creditors’ rights generally,
and (b) is subject to the availability of equitable remedies, as determined
in the discretion of the court before which such a proceeding may be
brought.

     

    9.4           Consents; No
Conflict.  Except for the approval of Orthofix’s Board of
Directors which has been obtained prior to the date of this Agreement, no
material consent, authorization, permit, waiver or approval of or from, or
notice to, any Person or any governmental authority is required as a condition
to the execution and delivery of this Agreement by Orthofix or the performance
of Orthofix’s obligations hereunder.  The execution and delivery of this
Agreement and the performance of Orthofix’s obligations hereunder will not give
rise to a right of termination of, contravene or constitute a default under, or
be an event which with the giving of notice or passage of time or both will
become a default under, or give to others any rights of termination or
cancellation of, or give rise to a right of acceleration of the performance
required by or maturity of, or result in the creation of any lien, charge or
encumbrance, claim, cost, tax, losses or loss of any rights with respect to the
Matrix pursuant to any of the terms, conditions or provisions of or under any
applicable Law, Orthofix’s organizational documents or any material written or
oral contract or agreement to which Orthofix is a party or by which its assets
are bound.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

     

    9.5           Litigation and
Claims.  There is no claim, suit, proceeding or other
investigation pending, or, to Orthofix’s Knowledge, threatened against Orthofix
that would preclude Orthofix from entering into this Agreement or performing its
obligations hereunder.  Orthofix is not in default with respect to any
order, writ, injunction or decree of any governmental entity known to or served
upon Orthofix in any manner that would preclude Orthofix from entering into this
Agreement or performing its obligations hereunder.  There is no action
or suit by Orthofix and relating to the Collaboration or the Matrix that is
pending, threatened or contemplated against any other Person.

     

    9.6           Compliance With
Laws.  To Orthofix’s Knowledge, (a) Orthofix is not in material
violation of or in material default under any Law applicable to Orthofix with
respect to the Collaboration or the Matrix, including the PHSA and relevant
sections of the FDCA, the NOTA and 21 C.F.R. Part 1271, Human Cells,
Tissues, and Cellular or Tissue-Based Products, in each case as currently
applied by the FDA or other Regulatory Authority, (b) all material permits have
been issued or granted to Orthofix (i) pursuant to which Orthofix currently
operates or holds any interest in the property relating to the Collaboration or
the Matrix, or (ii) which are required for its participation in the
Collaboration as contemplated by this Agreement or the holding of any such
interest, and (c) all such permits are in full force and effect and constitute
all material permits required to permit MTF to participate in the
Collaboration.

     

    9.7           Intellectual
Property.  The Existing Orthofix Technology licensed under this
Agreement is Controlled by Orthofix, and, except as set forth on Schedule 9.7 attached
hereto, is free and clear of any liens, charges and encumbrances created by
Orthofix.  Orthofix is not aware of any infringement of a valid claim
of an existing patent or any other intellectual property right in connection
with the Existing Orthofix Technology licensed under this Agreement, and has
disclosed to MTF all reasonably relevant information regarding the Existing
Orthofix Technology licensed under this Agreement, including all patent opinions
obtained by Orthofix related thereto.  To Orthofix’s Knowledge, no
Patent included in the Existing Orthofix Technology licensed under this
Agreement is invalid or unenforceable, in whole or in part.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

     

    9.8           Disclaimer of
Warranties.  EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE IX, ORTHOFIX
MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, IN FACT
OR BY OPERATION OF LAW, AND ORTHOFIX DISCLAIMS, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

     

    ARTICLE
X

    SPECIFICATIONS

     

    10.1        General. The Parties agree
that the Matrix will at all times conform to, comply with, and will be
Processed, supplied and distributed in accordance with, the Specifications and
applicable Law.  Set forth in Exhibits C and D attached hereto and
incorporated herein by reference are, respectively, the Specifications and the
procedures established pursuant to the Development Agreement for verification
that each Lot complies with the Specifications (the “Release Criteria”)
which may be subsequently amended in accordance with the terms of the
Development Agreement and the terms hereof.

     

    10.2        Certificate of
Analysis.  Within fifteen (15) days after the end of each
calendar month, MTF will deliver to Orthofix a COA with respect to each Lot from
which any Authorized Order was fulfilled during the immediately preceding
calendar month.  Set forth in Exhibit E attached
hereto and incorporated herein by reference is the form of COA.

     

    10.3        Notice of Failure to Meet
Specifications.  MTF will notify Orthofix promptly, but in any
event within seventy-two (72) hours, after its discovery that any Lot, which has
previously been approved in accordance with procedures set forth herein, fails
to comply in any material respect with the Specifications.  MTF will
notify Orthofix of such fact along with details concerning the nature of any
such failure to meet the Specifications.  MTF will make, at its
expense, such further internal investigation of any failure to meet the
Specifications that it deems appropriate under the circumstances, as required by
Law, and otherwise consistent with its obligations hereunder.  MTF
will be solely responsible for all costs associated with failure by any Lot to
meet the Specifications.

     

    10.4        Changes to Specifications and Release
Criteria.  Either Party may request a change to the
Specifications (including line extensions) or Release Criteria at any time by
giving a written request to the other Party.  Any change requested by
MTF will describe the requested change and explain the anticipated impact of
such change on MTF’s performance of its obligations to Process, supply and
distribute the Matrix in accordance with this Agreement; and in response to any
change requested by MTF, Orthofix will advise MTF, as promptly as practicable,
of the anticipated impact of such change on Orthofix’s performance of its
obligations under this Agreement.  Any change requested by Orthofix
will describe the requested change and explain the anticipated impact of such
change on Orthofix’s performance of its obligations under this Agreement; and in
response to any change requested by Orthofix, MTF will advise Orthofix, as
promptly as practicable, of the anticipated impact of such change on MTF’s
performance of its obligations to Process, supply and distribute the Matrix in
accordance with this Agreement.  No change to the Specifications or
the Release Criteria will become effective unless and until approved by the
Steering Committee.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

    

     

    10.5         Compliance with Specifications and
Release Criteria.  MTF will conduct quality control testing of
each Lot prior to shipment to verify that such Lot satisfies the Specifications
and the Release Criteria and will retain records pertaining to such testing as
required by applicable Laws.  MTF will not ship any Lot hereunder
which, as indicated by quality control testing as set forth above, does not
satisfy any of the foregoing requirements.

     

    ARTICLE
XI

    BOOKS
AND RECORDS; COMPLIANCE AUDITS

    AND
RELATED REGULATORY MATTERS

     

    11.1         Books
and Records; Compliance Audits.

     

    (a)           Books and
Records.  Each Party will
maintain complete and accurate books, records and documentation related to its
activities hereunder, including, without limitation, its Processing, supply,
distribution and Commercialization (as applicable) of the Matrix hereunder for
the longer of (i) five (5) years after shipment of any quantity of the
Matrix, or (ii) the period of time required by applicable Laws; provided,
however, that each Party will maintain during the Term and for six (6) years
after issuance of the last of any Patent(s) issued to such Party for the
Developed Technology, complete and accurate books, records, and documentation
related to any such Patent(s) and related intellectual property, in sufficient
detail and in good scientific manner appropriate for establishing and defending
any such Patent(s) and related intellectual property, which will fully and
properly reflect in all material respects all work done and results achieved by
such Party in connection therewith.  No records required by this
Agreement will be discarded by either Party without specific prior written
notification of such Party’s intent to discard to the other Party.  Those
records (or copies of those records) that such Party is unwilling to retain
will, at the request of the other Party, be transferred to the other Party for
storage.  Without limitation of the foregoing, MTF will maintain, in accordance with all applicable
Laws, required records, including records relating to complaints, Donor
Eligibility Requirements, cGTP, and reporting to the FDA under 21 C.F.R. Part
1271.

     

    (b)           Performance of
Audit.  Subject to the provisions of Section 4.2 (which
shall apply, exclusively, to the subject matter thereof), each Party will be
entitled, at its own expense and in connection with the Collaboration, to Audit
any facility, quality systems, books, records and regulatory documentation of
the other Party related to the other Party’s activities hereunder, during the
Term and, in the case of such books, records and documentation, thereafter for
the respective time periods described in Section
11.1(a).  This right of Audit will also accrue to such Party’s
representatives designated to inspect on its behalf or in cooperation with such
Party, provided that such representatives agree in writing to be bound by the
same confidentiality requirements that apply to the auditing Party under this
Agreement.  Such Audits will be for the purpose of quality assurance
and control and confirming the audited Party’s compliance with applicable Laws
and its obligations under this Agreement and exercising any privileges under
this Agreement.  Upon reasonable prior notice, each Party will provide
the other Party and its designated representatives with reasonable access to
such Party’s facilities and documentation during normal business hours for the
purpose of conducting such Audit.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

    

     

    (c)           Audit
Feedback.  Within thirty (30) days after completing the results
of any Audit hereunder, an auditing Party will submit to the audited Party a
written report outlining its findings and/or observations from any such
Audit.  If deficiencies are discovered during an Audit that could, in
the auditing Party’s reasonable opinion, prevent the audited Party from
satisfying its obligations under this Agreement, then, provided that the audited
Party agrees with the auditing Party’s opinion, the audited Party will promptly
correct such deficiencies at its own expense and prior to filling new or
outstanding Authorized Orders, and will notify the auditing Party in writing
when such deficiencies are corrected.  If the audited Party does not
agree with the auditing Party’s opinion, the Parties will direct the dispute to
the Steering Committee.

     

    (d)           Acknowledgement.  A
Party’s or its representative’s exercise of its Audit rights hereunder will in
no way waive, modify or diminish the other Party’s obligations under this
Agreement.

     

    11.2        Regulatory
Matters.

     

    (a)           Compliance.  Each
Party will, during the Term, comply in all material respects with all Laws
applicable to the Matrix and to the activities, including Processing and
Commercialization (as applicable), undertaken by such Party pursuant to this
Agreement.  MTF will Process, supply and distribute the Matrix in
compliance in all material respects with the quality control procedures approved
under the Development Agreement.

     

    (b)           AATB
Standards.  MTF will maintain membership in the AATB during the
Term, unless MTF notifies Orthofix to the contrary in writing, and whether or
not MTF maintains such membership, MTF will comply in all material respects with
the most current voluntary standards adopted by the AATB applicable to its
activities undertaken pursuant to this Agreement.

     

    (c)           Regulatory Filings; Related
Data.  MTF will prepare and submit all regulatory filings,
submissions and payments necessary to permit the Processing and
Commercialization of the Matrix as contemplated under the Marketing Plan, and
will gather and maintain data and records in connection therewith (including for
potential submissions or reporting to the FDA and other Regulatory
Authorities).  Notwithstanding MTF’s responsibility for regulatory and
legal compliance, all material regulatory submissions will be subject to review
and approval by the Steering Committee which approval will not be unreasonably
withheld, conditioned or delayed.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

    

     

    11.3         Complaints.

     

    (a)           Records;
Notification.  Each of Orthofix and MTF will keep written
records of all customer complaints that it receives and promptly advise the
other Party in writing or by electronic mail of all such complaints, and will
notify the other Party by telephone of all potential adverse reactions involving
communicable disease within twenty-four (24) hours of knowledge thereof and in
writing or by electronic mail within two (2) business days of receipt of the
preliminary details thereof.

     

    (b)           Complaint
Handling.  MTF will be responsible for complaint handling,
investigations and reports to the FDA and other governmental authorities as
required by Law, including the provisions of 21 C.F.R. Part
1271.  Each Party will cooperate fully with the other Party in dealing
with customer complaints concerning the Matrix and will take such action to
promptly resolve such complaints as may be reasonably requested by the other
Party.  Orthofix will reasonably cooperate with MTF to enable MTF to
fulfill all applicable governmental investigation and reporting requirements
arising from complaints or adverse events or reactions.

     

    11.4         Regulatory
Correspondence.  During the Term, MTF will notify Orthofix
promptly (but in any event within seventy-two (72 hours)) of (a) any
establishment inspection observations (including any FDA Form 483), letter,
citation, indictment, claim, lawsuit, or enforcement proceeding threatened,
issued or instituted by any governmental authority to or against MTF relating to
the Processing of the Matrix hereunder, (b) any notice, order, correspondence,
or other form of communication threatening or proposing to revoke or suspend or
of any communication that revokes any license, registration, authorization,
approval, exemption, allowance, or permit held or maintained by MTF relating to
the Processing of the Matrix hereunder, or (c) any charge brought against MTF
or, to MTF’s Knowledge, any director, officer, employee or consultant of MTF
under any Law for any act or omission relating to the development of the Matrix
or otherwise relating to regulation of the Matrix under any applicable Law.
During the Term, Orthofix will notify MTF promptly (but in any event within
seventy-two (72) hours) of any charge brought against Orthofix or, to Orthofix’s
Knowledge, against any director, officer, employee or consultant of Orthofix
under any Law for any act or omission relating to the development of the Matrix
or otherwise relating to regulation of the Matrix under any applicable
Law.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
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    11.5         Regulatory
Inspections.  If MTF or a subcontractor is inspected by any
agent of any Regulatory Authority (a “Regulatory
Inspection”) in connection with its processing of the Matrix hereunder,
MTF will promptly notify Orthofix of the results (and, in any event, will do so
within seventy-two (72) hours of completion of the inspection), including any
establishment inspection observations (including any FDA Form 483), letter,
citation, significant oral comments or observations, written comments or notices
received from the AATB or any applicable Regulatory Authority, which relate to
the development or Processing of the Matrix hereunder, if
applicable.  With respect to the forgoing, each Party will, during the
Term, provide to the other Party, promptly upon such other Party’s request,
copies of any notice or correspondence from or to any Regulatory Authority that
directly relates to the Matrix.  Such notices and correspondence are
considered Confidential Information in accordance with this Agreement. The
Parties will cooperate in the development and review of responses that are
required to be submitted to any Regulatory Authority relating to the development
or Processing of the Matrix hereunder prior to submission to the Regulatory
Authority.  MTF hereby further agrees to advise Orthofix promptly
(and, in any event, within seventy-two (72) hours) of learning of any announced
or scheduled Regulatory Inspection of any Facility, or any facility of a
subcontractor of MTF, where such Regulatory Inspection is anticipated to be
specifically related to the Matrix or its Processing hereunder.  In
such cases, MTF agrees to permit, to the extent reasonably practical, one or
more representative(s) of Orthofix to be present if requested by
Orthofix.

     

    ARTICLE
XII

    RECALLS

     

    Either
Party who becomes aware of any defect, problem or adverse condition in the
Matrix will promptly notify the other Party of such defect, problem or adverse
condition.  MTF will have responsibility for determining whether to
initiate, and for initiating and conducting, any recall, market withdrawal,
field action, removal, correction or field notice (a “Recall”) related to
the Matrix.  Orthofix will cooperate with MTF in the conduct of any
Recall.  MTF will bear the costs and expenses of any Recall related to
the Matrix, including reasonable costs incurred by Orthofix.  Orthofix
will have the right to initiate at its own expense any patient testing with
respect to the Matrix other than that which is required by Law, and Orthofix’s
election to initiate such testing will not affect MTF’s indemnification
obligations hereunder.  Nothing contained herein will be construed as
restricting the right of either Party to make a timely report of such matters to
any Regulatory Authority or take other action that it deems to be appropriate or
required by applicable Laws.

     

    ARTICLE
XIII

    TERM;
TERMINATION

     

    13.1        Term. Unless sooner terminated
pursuant to the terms herein, this Agreement will commence on the Effective Date
and will continue until the tenth (10th)
anniversary of the Effective Date (the “Initial
Term”).  Six months prior to the date of expiration of the
Initial Term, and six (6) months prior to the expiration of any renewal term, as
applicable, the Parties will begin negotiating in good faith for purposes of
renewing this Agreement for an additional two (2) year term to begin immediately
upon the expiration of the then-current term.  In the event that the
Parties are unable to reach agreement on renewal by the date of expiration of
the then-current term, each Party will reduce to writing its final proposal with
respect to renewal, this Agreement shall expire by its terms on such date, and
for a period of two (2) years after such date neither Party will enter into an
agreement for Commercialization of the Matrix with any Third Party on terms less
favorable to it than those which were offered by the other Party and set forth
in such writing.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
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    13.2         Termination for Default.  Either Party may
terminate this Agreement in the event of the material breach or material default
by the other Party of the material terms and conditions hereof which is not
cured as set forth in this Section
13.2.  In the event of such a material breach or material
default, the terminating Party will first give to the defaulting Party written
notice of the proposed termination of this Agreement, specifying the grounds
therefor.  Upon receipt of such notice, the defaulting Party will have
sixty (60) days to cure such material breach or material default.  If
the defaulting Party does not cure such breach or default within such period,
then this Agreement will terminate automatically on the sixtieth (60th) day
after receipt by the defaulting Party of the termination
notice.  Termination of this Agreement pursuant to this Section 13.2 will not
affect any other rights or remedies which may be available to the non-defaulting
Party.

     

    13.3         Termination for Bankruptcy,
Insolvency.  A Party may
terminate this Agreement upon the occurrence of either of the
following:

     

    (a)           the
entry of a decree or order for relief by a court having jurisdiction in the
premises in respect of the other Party in an involuntary case under the United
States Bankruptcy Code, as now constituted or hereafter amended (the “Bankruptcy Code”), or
any other applicable federal or state insolvency or other similar Law and the
continuance of any such decree or order unstayed and in effect for a period of
sixty (60) consecutive days; or

     

    (b)           the
filing by the other Party of a petition for relief under the Bankruptcy Code or
any other applicable federal or state insolvency or other similar
Law.

     

    All
licenses granted by each Party to the other Party in this Agreement are, and
will otherwise be deemed to be, for the purpose of Section 365(n) of the
Bankruptcy Code, the licenses of rights to “intellectual property” as defined
under Section 101 of the Bankruptcy Code.  Each Party, as a licensee
of intellectual property rights under this Agreement, will retain and may fully
exercise all of its rights and elections under the Bankruptcy Code.  The
Parties hereto further agree that, in the event that any proceeding will be
instituted by or against either Party seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any Law
relating to bankruptcy, insolvency, or reorganization or relief of debtors, or
seeking an entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
or it will take any action to authorize any of the foregoing actions, the other
Party will have the right to retain and enforce its rights in and to such
Party’s intellectual property under this Agreement in accordance with Section
365(n) of the Bankruptcy Code.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
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    13.4        Other Termination
Rights.  Either Party may terminate this Agreement upon written
notice to the other Party (a) if a court or Regulatory Authority that regulates
the Matrix takes any action the result of which would prohibit or significantly
restrict the sale, marketing, use, or manufacture of the Matrix, (b) if,
prior to the Effective Date of this Agreement, the Development Agreement is
terminated for any reason, or (c) pursuant to Section
17.3.  Orthofix may further terminate this Agreement upon
written notice to MTF: (x) in the event of an Infringement Claim or a reasonable
determination by Orthofix that an Infringement Claim is likely to be initiated,
if after written notice by Orthofix to MTF to cease Processing, supplying and
distributing the Matrix, MTF continues to Process, supply or distribute the
Matrix during the Cessation Period or (y) if Orthofix enters into any settlement
with the consent of MTF of an Infringement Claim pursuant to which Orthofix
agrees not to Process or Commercialize the Matrix.

     

    13.5         Expiration;
Termination; Consequences.

     

    (a)           Survival.  The
following provisions, in accordance with their respective terms, will survive
termination or expiration of this Agreement for any reason:  Section 4.2 (Service
Fee Audit), ARTICLE VII
(Intellectual Property), Section 8.10
(Disclaimer of Warranties), Section 9.8
(Disclaimer of Warranties), Section 11.1 (Books
and Records; Compliance Audits), Section 13.3
(Termination for Bankruptcy, Insolvency), Section 13.5
(Expiration; Termination; Consequences), ARTICLE XIV
(Indemnification; Insurance), ARTICLE XV
(Disclaimer of Indirect Damages), ARTICLE XVI
(Confidentiality; Restrictive Covenants; Publications), ARTICLE XVIII
(Press Releases; Use of Names), ARTICLE IX
(Dispute Resolution) and ARTICLE XX
(Miscellaneous).

     

    (b)           Return of Confidential
Information.  Upon termination or expiration of this Agreement,
each Party will immediately deliver to the other (and cause its employees,
agents, representatives and subcontractors to so deliver), at such Party’s
expense, all Confidential Information of the other Party, including any and all
copies, duplications, summaries and/or notes thereof or derived therefrom,
regardless of the format; provided, however, that each
Party will, upon reasonable notice to such Party and during such Party’s normal
business hours, provide the other Party with access to Confidential Information
as is reasonably necessary for purposes of the requesting Party’s compliance
with applicable Laws or in connection with such Party’s defense of any
Third-Party claims related thereto.

     

    (c)           Accrued
Obligations.  Expiration or termination of this Agreement will
not relieve the Parties of any obligation accruing prior to the effective date
of such expiration or termination, including, with respect to MTF, (i) the
fulfillment of any outstanding Authorized Orders received prior to the effective
date of expiration or termination of this Agreement and (ii) payment to Orthofix
of any Marketing Fees due and payable as a result of Authorized Orders received
prior to the effective date of expiration or termination of this
Agreement.

     

     

    
      

    

    
      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
XIV

    INDEMNIFICATION;
INSURANCE

     

    14.1         Indemnification by
Orthofix. Orthofix hereby agrees
to indemnify, defend, and hold harmless MTF, its Affiliates and their respective
directors, officers, employees, agents, successors and permitted assigns (the
“MTF
Indemnitees”) from and against any and all damages, losses, liabilities,
claims, actions, proceedings, and expenses (including reasonable attorneys’ fees
and expenses) (collectively, “Damages”) resulting
from or arising out of (a) any unauthorized claim made by Orthofix with respect
to the Matrix that is inconsistent with the Specifications, with the labeling or
materials approved by MTF, (b) Orthofix’s breach of any of its representations,
warranties or covenants hereunder, (c) Orthofix’s gross negligence or willful
misconduct or the grossly negligent actions or willful misconduct of any of
Orthofix’s Affiliates, employees, directors or agents in connection with this
Agreement, including, without limitation, any product liability and other claims
for personal injury or death caused by the Matrix if resulting form such
actions, and (d) any Third-Party claim that the Processing, distribution or
supply under this Agreement and for purposes of the Collaboration of the Matrix
in accordance with the Specifications and for which Orthofix is paid a Marketing
Fee (or which is delivered in furtherance of Orthofix’s marketing efforts or as
a result of Orthofix’s introduction regardless of whether a Marketing Fee is
paid) violates the intellectual property rights of a Third Party and/or
infringes the valid claim of an existing Patent of a Third Party (an “Infringement Claim”),
it being understood that a Third-Party Claim regarding the development or
Processing of the Matrix independent of the Collaboration shall not be within
the definition of “Infringement Claim;” provided, however,
that

     

    (i)           in
the event of an Infringement Claim or a reasonable determination by Orthofix
that an Infringement Claim is likely to be initiated, Orthofix will have the
right to direct MTF, by written notice, to cease Processing, supplying and
distributing the Matrix during the period beginning upon MTF’s receipt of
such notice and continuing until MTF’s receipt of written notice from Orthofix
that the Infringement Claim has been satisfactorily resolved in Orthofix’s
reasonable determination or is no longer expected to be initiated (the
“Cessation
Period”), and Orthofix will have no obligation to indemnify or
hold harmless MTF or the MTF Indemnitees from or against any Damages
attributable to any Processing, supply or distribution of the Matrix during
the Cessation Period; and

     

    (ii)           Orthofix
will not be required to indemnify, defend and hold harmless the MTF Indemnitees
from or against any counter-claim or other claim against an enforcement action
filed by MTF (in exercising its step-in rights pursuant to Section 6.5(e)) with
respect to any alleged infringement of the Existing Orthofix Technology or the
Developed Technology.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

    

     

    In the
event that Orthofix directs MTF, by written notice, to cease development and
Processing of the Matrix based on a reasonable determination that an
Infringement Claim is likely to be initiated and MTF complies therewith,
Orthofix shall reimburse MTF for fifty percent (50%) of MTF’s actual, documented
cost for processing the quantity of the Matrix in MTF’s inventory on the date of
such notice and fifty percent (50%) of MTF’s actual documented cost for all
Matrix work in process on such date.

     

    14.2         Indemnification by
MTF.  MTF hereby agrees to indemnify, defend, and hold harmless
Orthofix, its Affiliates and their respective directors, officers, employees,
agents, successors and permitted assigns from and against any and all Damages,
resulting from or arising out of (a) MTF’s breach of any of its
representations, warranties, or covenants hereunder, (b) MTF’s gross
negligence or willful misconduct or the grossly negligent actions or willful
misconduct of any of MTF’s Affiliates, employees, officers, directors or agents
in connection with this Agreement and (c) product liability and other
claims for personal injury or death caused by the Matrix insofar as Processed
and supplied by MTF.

     

    14.3         Third-Party
Claims Procedure.

     

    (a)           Notice of
Claims.  Each Party indemnified under the provisions of this
Agreement, upon receipt of written notice of any claim, or the service of a
summons or other initial legal process upon it in any action instituted against
it by a Third Party, in respect of any claim for which such Party is entitled to
indemnification in accordance with this Agreement, will promptly give written
notice of such claim, or the commencement of such action, or threat thereof to
the Party from whom indemnity will be sought hereunder; provided, however, the failure
to provide such notice will not relieve the indemnifying Party of any of its
obligations hereunder except to the extent the indemnifying Party is materially
prejudiced by such failure.  The indemnifying Party will be entitled
at its own expense to participate in the defense of such claim or action, or, if
it will elect, to assume control of such defense, in which event such defense
will be conducted by counsel chosen by such indemnifying Party, which counsel
may be any counsel reasonably satisfactory to the indemnified Party against whom
such claim is asserted, and the indemnified Party will bear all fees and
expenses of any additional counsel retained by it.  Notwithstanding
the immediately preceding sentence, if the named parties in such action
(including impleaded parties) include the indemnified and the indemnifying
Parties, and the indemnified Party will have been advised by counsel that there
may be a conflict between the positions of the indemnifying Party and the
indemnified Party in conducting the defense of such action or that there are
legal defenses available to such indemnified Party different from or in addition
to those available to the indemnifying Party, then counsel for the indemnified
Party will be entitled, if the indemnified Party so elects, to conduct the
defense to the extent reasonably determined by such counsel to be necessary to
protect the interests of the indemnified Party, at the expense of the
indemnifying Party, if it is determined by agreement of the indemnifying Party
and the indemnified Party or by a court of competent jurisdiction that the
indemnified Party is entitled to indemnification hereunder for the Damages
giving rise to such action.  If the indemnifying Party elects not to
assume the defense of such claim or action, then such indemnifying Party will
reimburse such indemnified Party for the reasonable fees and expenses of any
counsel retained by it, and will be bound by the results obtained by the
indemnified Party in respect of such claim or action if it is determined by
agreement of the indemnifying Party and the indemnified Party or by a court of
competent jurisdiction that the indemnified Party is entitled to indemnification
hereunder for the Damages giving rise to such action; provided, however, that no such
claim or action will be settled without the written consent of the indemnifying
Party, which consent will not be unreasonably withheld, conditioned or delayed
and provided,
further, that
an indemnified Party that declines to consent to a proposed settlement will not
be entitled to be indemnified against, and will be fully responsible for, (i)
the amount, if any, by which any subsequent settlement amount or damages award
exceeds the amount of the proposed settlement that was declined, and (ii) all
reasonable costs of defense and settlement relating to the period after the date
on which consent to the proposed the proposed settlement was
declined.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
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    (b)           Payment
Terms.  All amounts payable under this ARTICLE XIV will be
paid promptly after receipt by the indemnifying Party of written notice from the
indemnified Party stating that such Damages have been incurred, the amount
thereof and of the related indemnity payment and substantiation of such amount
and such indemnity payment; provided, however, any disputed
amounts will be due and payable promptly after such amounts are finally
determined by a court of competent jurisdiction or by mutual agreement of the
Parties to be owing by the indemnifying Party to the indemnified
Party.

     

    14.4         Insurance.  Each
Party will procure and maintain comprehensive general liability and product
liability insurance (or, in the case of MTF, professional liability insurance),
in amounts of not less than $2,000,000 per incident and $10,000,000 in the
aggregate annually.  Each Party will maintain such insurance during
the Term and for a period of ten (10) years following the end of the
Term.  Each Party will cause the other Party to be named as an
additional insured under such insurance and will provide the other Party proof
of such insurance upon request.  Each Party will give the other Party
at least thirty (30) days notice of any cancellation, termination or change in
such insurance.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
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    ARTICLE
XV

    DISCLAIMER
OF INDIRECT DAMAGES;

    LIMITATIONS
ON LIABILITY

     

    Notwithstanding
any other provision contained in this Agreement:

     

     

    15.1        Indirect
Damages.  In no event will either Party be liable to the other
Party for incidental, special, consequential or other indirect damages,
including any claims for damages based upon lost profits (it being acknowledged
and agreed that amounts paid or incurred by a Party to any Third Parties,
whether or not constituting indirect damages to such Third Parties, shall not be
construed as indirect damages to such Party).

     

    15.2        Maximum Aggregate
Liability.  The maximum aggregate liability of MTF hereunder
for any and all causes whatsoever, and Orthofix’s remedies, and whether or not
MTF is notified of the possibility of Damages to Orthofix, will be limited to
the amount of the Service Fees retained by MTF hereunder.  The maximum
aggregate liability of Orthofix hereunder for any and all causes whatsoever, and
MTF’s remedies, and whether or not Orthofix is notified of the possibility of
Damages to MTF, will be limited to the amount of Marketing Fees paid to Orthofix
hereunder.

     

    15.3         Exceptions.  The
disclaimer and limitations set forth in this ARTICLE XV will not
apply to any liability of either Party arising under Section 6.2 (Rights
of First Offer and First Refusal), ARTICLE XIV
(Indemnification and Insurance), other than under Section 14.1(a),
Section
14.1(b), Section 14.2(a)
thereof, and ARTICLE
XVI (Confidentiality; Restrictive Covenants; Publication).

     

    ARTICLE
XVI

    CONFIDENTIALITY;
RESTRICTIVE COVENANTS; PUBLICATION

     

    16.1         Treatment
of Confidential Information.

     

    (a)           Obligation;
Exceptions.  All Confidential Information disclosed by one
Party to the other Party hereunder will be maintained in confidence by the
receiving Party and will not be disclosed to any Third Party or used for any
purpose except as set forth herein without the prior written consent of the
disclosing Party, for a period of ten (10) years from disclosure of such
Confidential Information, except to the extent that such Confidential
Information:

     

    (i)           
 is known by receiving Party at the time of its receipt, and not through a
prior disclosure by the disclosing Party, as documented by the receiving Party’s
business records;

     

    (ii)           is
or becomes part of the public domain through no fault of the receiving
Party;

     

    (iii)           is
subsequently disclosed to the receiving Party by a Third Party who may lawfully
do so and is not under an obligation of confidentiality to the disclosing
Party;

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
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    (iv)           is
developed by the receiving Party independently of Confidential Information
received from the disclosing Party, as documented by the receiving Party’s
business records;

     

    (v)           is
disclosed to a governmental agency (A) in order to obtain Patents with
respect to the Matrix, but such disclosure may be made only to the extent
reasonably necessary to obtain such Patents, or (B) as part of or in connection
with any mandatory filing with a governmental agency; and/or

     

    (vi)           is
deemed necessary by either Party to be disclosed to its Affiliates, agents,
consultants, and/or other Third Parties for the Processing and/or
Commercialization of the Matrix and/or in connection with a permitted licensing
transaction and/or a permitted assignment under this Agreement, and/or loan,
financing or investment and/or acquisition, merger, consolidation or similar
transaction (or for such entities to determine their interest in performing such
activities) in each case on the condition that any Third Parties to whom such
disclosures are made agree to be bound by the confidentiality and non-use
obligations contained in this Agreement; provided, however, that the
term of confidentiality for such Third Parties will be no less than ten (10)
years.

     

    (b)           Aggregated
Information.  Any combination of features or disclosures will
not be deemed to fall within the foregoing exclusions merely because individual
features are published or available to the general public or in the rightful
possession of the receiving Party unless the combination itself falls within the
applicable exclusion.

     

    (c)           Required
Disclosures.  If a Party is required by judicial or
administrative process to disclose Confidential Information that is subject to
the non-disclosure provisions of this ARTICLE XVI such
Party will promptly inform the other Party of the disclosure that is being
sought in order to provide the other Party an opportunity to challenge or limit
the disclosure obligations.  Confidential Information that is
disclosed by judicial or administrative process will remain otherwise subject to
the confidentiality and non-use provisions of this ARTICLE XVI, and the
Party disclosing Confidential Information pursuant to law or court order will
take all steps reasonably necessary, including without limitation obtaining an
order of confidentiality, to ensure the continued confidential treatment of such
Confidential Information.

     

    16.2         Non-Compete.  Subject
to the provisions of Section 6.2(a) and
Section 6.2(b),
during the Term and for one (1) year thereafter, neither Party will, and will
not permit any of its Affiliates to, except as provided in this Agreement,
directly or indirectly, as a principal, agent, owner, joint venturer, investor,
manager, operator or consultant, engage in the Processing, development,
manufacture, sale, marketing, use, import, export, supply, distribution or other
Commercialization in the Territory of bone-growth allograft products containing
viable allogeneic stem cells derived from cadavers; provided, however, that the
Parties acknowledge and agree that (a) Orthofix is a party to the Osiris
Agreement under which Orthofix distributes a bone allograft product, under the
trademark “Trinity”TM, that contains viable allogeneic stem cells derived from
cadavers, (b) as of the date hereof, Orthofix has an existing inventory of the
Trinity product, (c) Orthofix shall be entitled to exhaust such inventory of the
Trinity product, but in no event subsequent to the later of (i) six (6) months
after the Effective Date or (ii) October 1, 2009, before placing orders with MTF
for the Matrix, (d) Orthofix may fill orders for all or any portion of the
quantities set forth in any Forecast from such inventory of the Trinity product
before placing orders with MTF for the Matrix, but in no event later than the
period described under clause (c) immediately preceding, and (e) proceeding as
set forth herein will not be deemed to be a violation by Orthofix of Section 6, this Section 16.2 or any
other provision of this Agreement.  Each Party acknowledges and agrees
that the covenants and agreements set forth in this Section 16.2
have been specifically negotiated and are essential and material terms and
conditions of this Agreement and a material part of the transactions
contemplated by this Agreement and the Development Agreement.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
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    16.3         Non-Solicitation.  During
the Term and, for a period of one (1) year thereafter, neither Party will
directly or indirectly solicit, engage or hire any employee or contractor of the
other Party or its Affiliates; provided, however, that nothing
herein will prohibit either Party, directly or indirectly (for such Party’s own
account or for the account of any other Person), from soliciting for employment,
hiring or employing (a) any Person who responds to a general solicitation
or advertisement in a newspaper, on the internet, or in some similar medium that
is not directed at any individual employee or group of employees of the other
Party; (b) any Person whose employment has been terminated without cause by
the other Party; or (c) any Person referred by a recruiter, as long as such
recruiter is directed to not target or solicit employees of the other
Party.

     

    16.4         Publications.  Each
of Orthofix and MTF will have the right to publish, during the Term or after its
expiration or termination, the results of research related to the Matrix that is
conducted during the Term, subject in each instance to the prior written
approval of the other Party, which approval will not be unreasonably withheld,
conditioned or delayed.  The Party seeking to publish any such results
will submit the proposed publication to the other Party for review a minimum of
sixty (60) days prior to the contemplated publication and the non-publishing
Party will have a reasonable opportunity to recommend any changes that it
reasonably believes are necessary.  If the non-publishing Party does
not object to such publication or recommend any changes in writing within such
sixty (60) day period such approval will be deemed granted.

     

    ARTICLE
XVII

    FORCE
MAJEURE

     

    17.1         Effects of Force Majeure.  Neither Party
will be held liable or responsible for failure or delay in fulfilling or
performing any of its obligations under this Agreement to the extent that such
failure or delay is caused or occasioned by acts of God, acts of the public
enemy, fire, explosion, flood, drought, hurricane, weather conditions, war,
riot, sabotage, embargo, strikes or other labor disputes (a “Force Majeure
Event”); provided, however, that in the
event of a Force Majeure Event affecting the Processing of the Matrix, MTF will
use Reasonable Commercial Efforts to implement the Contingency Plan before it
will be entitled to be excused from its obligations under this Agreement
pursuant to this Section
17.1.  Such excuse will continue as long as the Force Majeure
Event continues.  Upon cessation of such Force Majeure Event, such
Party will promptly resume performance hereunder.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

    

     

    17.2        Notice of Force
Majeure.  Each Party agrees to give the other Party prompt
written notice of the occurrence of any Force Majeure Event, the nature thereof,
and the extent to which the affected Party will be unable fully to perform its
obligations hereunder.  Each Party further agrees to use Reasonable
Commercial Efforts to correct the Force Majeure Event as quickly as possible and
to give the other Party prompt written notice when it is again fully able to
perform such obligations.

     

    17.3         Termination.  If a Force
Majeure Event lasts for more than sixty (60) calendar days and during such
period MTF cannot Process the Matrix (or arrange for the Processing of the
Matrix pursuant to the Contingency Plan) as a result of the Force Majeure Event,
Orthofix may use an alternative supplier of the Matrix to fulfill Authorized
Orders for the shorter of (i) the duration of the Force Majeure Event or (ii)
the period (not exceeding one-hundred eighty (180) days beyond the cessation of
the Force Majeure Event) necessary to allow Orthofix to honor, on behalf of MTF,
the Authorized Orders, if any, to any Customer in effect at the time of
cessation.  If, as a result of a Force Majeure Event, a Party is
unable fully to perform its obligations hereunder for any consecutive period of
one hundred eighty (180) days, the other Party will have the right to terminate
this Agreement in its entirety, upon providing written notice to the
non-performing Party, such termination to be effective thirty (30) days from the
date of such notice.

     

    ARTICLE
XVIII

    PRESS
RELEASES; USE OF NAMES

     

    18.1        Press
Releases.  Except as otherwise required by Law or any rule of
the NASDAQ Stock Market, any announcement, press release, publicity, or other
public statement related to this Agreement or either Party’s performance
hereunder prepared by one Party will be submitted to the other Party prior to
release for approval, which approval will not be unreasonably withheld,
conditioned or delayed by such other Party.

     

    18.2        Use of
Names.  Except as otherwise required by Law or by the terms of
this Agreement or as mutually agreed upon by the Parties, neither Party will
make any use of the name of the other Party in any advertising or promotional
material, or otherwise, without the prior written consent of the other Party,
which consent will not be unreasonably withheld, conditioned or delayed by such
other Party.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
XIX

    DISPUTE
RESOLUTION

     

    19.1         Internal
Escalation.  The Parties recognize that a bona fide dispute as
to certain matters may from time to time arise during the Term which relates to
either Party’s rights and/or obligations hereunder, including without
limitation, the inability of the Steering Committee under Section 3.3 to reach
a determination on any issue that the Steering Committee is authorized to
consider.  Except with respect to any right to injunctive relief for
any claims arising from any section of ARTICLE XVI or Section 20.3, in the
event of the occurrence of such a dispute, either Party will be required, by
written notice to the other Party, to have such dispute referred to the
respective chief executive officers of the Parties, for attempted resolution by
good faith negotiations within thirty (30) days after such notice is
received.

     

    19.2         Mediation.  Except
with respect to any right to injunctive relief for any claims arising from any
section of ARTICLE
XVI or Section
20.3, in the event the Parties’ respective chief executive officers are
not able to resolve such dispute within the thirty (30) day period set forth in
Section 19.1,
or such other period of time to which the Parties may mutually agree in
writing,  the Parties will endeavor in good faith to resolve the
dispute through mediation under the CPR Mediation Procedure in effect on the
date of this Agreement.  Unless otherwise mutually agreed to in
writing, the parties will select a mediator from the CPR Panels of Distinguished
Neutrals.

     

    19.3         Legal Process.  In
the event that the Parties are not able to resolve such dispute within forty
five (45) days after initiation of the mediation procedure set forth in Section 18.2, or such
other period of time to which the Parties may mutually agree in writing, each
Party will have the right to pursue any and all remedies available at law or in
equity.

     

    19.4     
   Venue.  For any
court proceeding initiated with respect to this Agreement (i) Orthofix hereby
irrevocably and unconditionally consents to the submission to the non-exclusive
jurisdiction of the United States District Court for the District of New Jersey,
and the courts of the State of New Jersey located within that district, if such
court proceeding is initiated by MTF and (ii) MTF hereby irrevocably and
unconditionally consents to the submission to the non-exclusive jurisdiction of
the United States District Court for the Western District of North Carolina, and
the courts of the State of North Carolina located within that district, if such
court proceeding is initiated by Orthofix.  Each Party further
irrevocably and unconditionally (i) agrees that service of any process, summons,
notice or document by registered mail or as otherwise provided in this Agreement
shall be effective service of process for any action, suit or proceeding brought
against it in any court whose jurisdiction is accepted as aforesaid, (ii) waives
any objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement in such courts, and (iii) agrees not to plead or claim in
any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
XX

    MISCELLANEOUS

     

    20.1        Independent
Contractors.  Although the Parties are engaged in a
Collaboration to Process and Commercialize the Matrix and have made and will
make contributions, financial and otherwise, to such Collaboration, the
relationship between Orthofix and MTF is that of independent contractors and
nothing herein will be deemed to constitute the relationship of partners, or
principal and agent between Orthofix and MTF.  Neither Party will have
any express or implied right or authority to assume or create any obligations on
behalf of or in the name of the other Party or to bind the other Party to any
contract, agreement, or undertaking with any Third Party.

     

    20.2        Assignment.  Neither
Party may assign this Agreement, in whole or in part, without the prior written
consent of the other Party; provided, however, that either
Party may assign this Agreement without the prior written consent of the other
Party to an Affiliate of such Party or in connection with a merger or sale of
all or substantially all of the stock or assets of such Party to a Third
Party.  Any permitted assignee will assume in writing all obligations
of its assignor under this Agreement.  No assignment will relieve
either Party of its responsibility for the performance of its obligations
hereunder. This Agreement will be binding upon and will inure to the benefit of
the Parties and their respective permitted successors and assigns and nothing in
this Agreement is intended to or shall confer any benefits, rights or remedies
unto any Person other than the Parties and their respective permitted successors
and assigns. Without limiting the generality of the foregoing, and
notwithstanding any representation or warranty of MTF provided herein with
respect to the Matrix or any other matter, Orthofix acknowledges and agrees that
all such representations and warranties are for the exclusive benefit of
Orthofix under this Agreement and will not be applicable or transferable to any
Customer or any other Person.

     

    20.3        Injunctive Relief; Specific
Performance.  Notwithstanding
anything to the contrary in ARTICLE XIX, the
Parties understand and agree that, in view of the uniqueness of the Matrix and
the long term Process, supply and distribution of the Matrix contemplated
hereunder, each Party will be entitled to specific performance and other forms
of injunctive relief in the event that the other Party breaches its obligations
hereunder (including, without limitation, under ARTICLE XVI), in
addition to any other remedy to which it may entitled, at law or in
equity.

     

    20.4        Waiver.  No failure
or delay on the part of either Party hereto to exercise any right, power, or
privilege hereunder or under any instrument executed pursuant hereto will
operate as a waiver, nor will any single or partial exercise of any right,
power, or privilege preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

    

     

    20.5         Severability. Both Parties
expressly agree and contract that it is not the intention of either Party to
violate any public policy, applicable Laws, treaties, or decisions of any
government or agency thereof.  If any provision or part thereof
contained in this Agreement is declared invalid by any court of competent
jurisdiction or a government agency having jurisdiction, such declaration will
not affect the remainder of the provision or the other provisions and each will
remain in full force and effect.

     

    20.6         Headings.  All
headings in this Agreement are for convenience of reference only and will not
affect the interpretation of this Agreement.

     

    20.7        Interpretation.  The
words “include”, “includes” and “including” and words of similar import will be
deemed to be followed by the phrase “without limitation” or “but not limited
to,” as the context may warrant.  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein will be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein); (b) any reference herein to any entity will
be construed to include the entity’s successors and assigns; (c) the words
“herein”, “hereof” and “hereunder”, and words of similar import, will be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof; and (d) all references herein to Articles, Sections, Addenda,
Exhibits or Schedules will be construed to refer to Articles, Sections, Addenda,
Exhibits and Schedules of this Agreement.

     

    20.8         Notices.  All
notices and other communications required or permitted to be given under this
Agreement will be in writing and will be delivered personally or sent by (a)
registered or certified mail, return receipt requested; (b) a
nationally-recognized courier service guaranteeing next-day delivery, charges
prepaid; or (c) facsimile (with the original promptly sent by any of the
foregoing manners).  Any such notices will be addressed to the
receiving Party at such Party’s address set forth below, or at such other
address as may from time to time be furnished by similar notice by either
Party:

     

    If to
MTF: 

    Musculoskeletal
Transplant Foundation, Inc.

    125 May
Street

    Suite
300

    Edison,
New Jersey  08837

    Attention:    Bruce
W. Stroever

    Facsimile
No.:  (732) 661-2297

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

    

     

    With a
copy (which will not constitute notice) to:

     

    McCarter
& English, LLP

    Four
Gateway Center

    100
Mulberry Street

    Newark,
New Jersey 07102

    Attention:
  
Howard Kailes, Esq.

    Facsimile
No.:  (973) 624-7070

     

    If to
Orthofix:

    Orthofix
Holdings, Inc. (c/o Orthofix International N.V.)

    The
Storrs Building

    Suite
250

    10115
Kincey Avenue

    Huntersville
Business Park

    Huntersville,
NC  28078

    Attention:
Chief
Executive Officer and General Counsel

    Facsimile
No.:  (704) 948-2690

     

    With a
copy (which will not constitute notice) to:

     

    Hogan
& Hartson LLP

    8300
Greensboro Drive

    Suite
1100

    McLean,
VA 22102

    Attention:  Philip
D. Porter

    Facsimile
No.: (703) 610-6200

     

    Any such
notice or communication will be effective upon such personal delivery or
delivery to such courier, upon transmission by facsimile (with acknowledgement
of a complete transmission), or three (3) days after it is sent by such
registered or certified mail, as the case may be.  Copies will be sent
in the same manner as originals.

     

    20.9        Counterparts. This Agreement
and any amendment or supplement hereto may be executed in counterparts, each of
which will be deemed to be an original, and all of which taken together will
constitute one and the same instrument.

     

    20.10      Governing Law.  All
questions of inventorship, and all other Patent rights of the Parties, will be
governed by the laws of jurisdiction from which the Patent in question issued or
in which the Patent application was filed.  In all other respects, the
validity, interpretation, and performance of this Agreement will be governed and
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of laws provisions thereof.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

    

     

    20.11      Waiver of Rule of
Construction.  Each Party has had the opportunity to consult
with counsel in connection with the review, drafting and negotiation of this
Agreement.  Accordingly, the rule of construction that any ambiguity
in this Agreement will be construed against the drafter will not
apply.

     

    20.12      Further Assurance. Each Party
will duly execute and deliver, or cause to be duly executed and delivered, such
further instruments, and do and cause to be done such further acts and things,
including the filing of such assignments, agreements, documents and instruments,
as may be necessary or as the other Party may reasonably request in connection
with this Agreement or to carry out more effectively the provisions and
purposes, or to better assure and confirm unto such other Party its rights and
remedies under this Agreement.

     

    20.13      Entire
Agreement.  This Agreement, including all addenda, exhibits and
schedules referred to herein, constitute the full understanding of the Parties
with respect to the subject matter hereof and a complete and exclusive statement
of the terms of their agreement.  This Agreement or any provision
hereof cannot be amended, changed, supplemented, or waived except in a writing
signed by each of the Parties hereto.  No modification to this
Agreement will be effected by the acknowledgment or acceptance of any purchase
order or shipping instruction form or similar documents containing terms or
conditions at variance with or in addition to those set forth
herein.  Any term or condition of any purchase order, sales
acknowledgment, or document which is in addition to, different from, or contrary
to the terms and conditions of this Agreement will be void.

     

    [The
rest of this page is intentionally left blank.]

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
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    IN WITNESS WHEREOF, the
Parties have caused this Matrix Commercialization Collaboration Agreement to be
duly executed and delivered as of the date first written above.

     

    
      	
               

            	
              MUSCULOSKELETAL
      TRANSPLANT FOUNDATION, INC.

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              By:

            	
              /s/ Bruce W.
    Stroever

            
	
               

            	
              Name:

            	
              Bruce W.
  Stroever

            
	
               

            	
              Title:

            	
              President and
  CEO

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              ORTHOFIX
      HOLDINGS, INC.

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              By:

            	
              /s/ Alan
  Milinazzo

            
	
               

            	
              Name:

            	
              Alan Milinazzo

            
	
               

            	
              Title:

            	
              Group President and
      CEO

            

    

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

    

    

    LIST OF ADDENDA AND
EXHIBITS

     

    Addendum
1 – Definitions

     

    Exhibit
A – MTF Order Acceptance Procedures

     

    Exhibit
B – Initial Steering Committee

     

    Exhibit
C – Specifications

     

    Exhibit
D – Release Criteria

     

    Exhibit
E – COA

     

    Exhibit
F – Contingency Plan

     

    Exhibit
G – MTF’s Knowledge

     

    Exhibit
H – Orthofix’s Knowledge

     

    

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

    

     

    Schedule
9.7 – Intellectual Property

     

    The
Existing Orthofix Technology is subject to certain liens pursuant to the Credit
Agreement, dated as of September 22, 2006, among Orthofix Holdings, Inc.,
Orthofix International N.V., Colgate Medical Limited, Victory Medical Limited,
Swiftsure Medical Limited, Orthofix UK LTD, certain subsidiaries of Orthofix
International N.V. identified therein, the Lenders identified therein, and
Wachovia Bank, National Association, as Administrative Agent, as amended (the
“Credit Agreement”), and including the Security Documents, as defined in the
Credit Agreement.

     

    

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

    

    

    Addendum
1 – Definitions

     

    The
following terms, whether used in the singular or plural, will have the meanings
assigned to them below for purposes of this Agreement:

     

    “AATB” means the
American Association of Tissue Banks.

     

    “Affiliate” means any
corporation or non-corporate entity which controls, is controlled by, or is
under common control with a Party.  A corporation or non-corporate
entity will be regarded as in control of another corporation if it owns or
directly or indirectly controls at least fifty percent (50%) of the voting stock
of the other corporation or (a) in the absence of the ownership of at least
fifty percent (50%) of the voting stock of a corporation or (b) in the case of a
non-corporate entity, the power to direct or cause the direction of the
management and policies of such corporation or non-corporate entity, as
applicable.

     

    “Agreement” means this
Matrix Commercialization Collaboration Agreement.

     

    “Audit” means a
reasonable review and/or inspection by either Party or its representatives of
Service Fee records in accordance with Section 4.2 and/or
facilities, processes, procedures, and documents (or of any subcontractor
permitted pursuant to Section 2.9) as
described in Section
10.1 of this Agreement.

     

    “Authorized Orders”
has the meaning set forth in Section 2.1(a).

     

    “Bankruptcy Code” has
the meaning set forth in Section
13.3(a).

     

    “Certificate of
Analysis” or “COA” means the
certificate for each Lot delivered hereunder confirming compliance with the
Specifications.

     

    “Cessation Period” has
the meaning set forth in Section
14.1.

     

    “cGTP” means current
Good Tissue Practice requirements set forth in 21 C.F.R. Part 1271, Subpart D,
as in effect and as may be amended or replaced by the FDA from time to
time.

     

    “Collaboration” means
the Processing and Commercialization of the Matrix by the Parties pursuant to
the terms and conditions of this Agreement.

     

    “Commercialization” or “Commercialize” means
activities directed to obtaining pricing and reimbursement approvals, marketing,
promoting, distributing, importing, supplying or transferring the
Matrix.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

    

     

    “Confidential
Information” means information which is disclosed by a Party (the “Disclosing Party”) to
the other Party (the “Receiving Party”) in
whatever media, and is marked, identified or otherwise acknowledged to be
confidential at the time of disclosure.

     

    “Contingency Plan”
means the contingency plan for the Processing and fulfillment of Authorized
Orders in the event of any interruption in MTF’s Processing capability as a
result of cessation of all or substantially all Processing operations with
respect to the Matrix at MTF’s facility located in Edison, New Jersey, set forth
in Exhibit F
and as it may be subsequently amended from time to time in accordance with the
procedures set forth herein and in the Development Agreement.

     

    “Control,” “Controls” or “Controlled by” means,
with respect to any item of or right under Patents, Know-How, Technology or
Inventions, the possession of (whether by ownership or license, other than
pursuant to this Agreement) or the ability of a Party to grant access to, or a
license or sublicense of, such items or right as provided for herein without
violating the terms of any agreement or other arrangement with any Third Party
existing at the time such Party would be required hereunder to grant the other
Party such access or license or sublicense.

     

    “CPI” means the “Price
for Index for all Urban Consumers, U.S. city average, all items, for the then
immediately preceding 12-month period” as published by the U.S.
Government.

     

    “Customers” has the
meaning set forth in Section 2.1(b).

     

    “Damages” has the
meaning set forth in Section
14.1.

     

    “Developed Technology”
means the Developed Technology (as defined in the Development Agreement) in
existence as of the Effective Date, and all Improvements during the Term with
respect thereto, including, without limitation, all Patents relating to the
foregoing.

     

    “Development
Agreement” has the meaning set forth in the Recitals.

     

    “Dispute Notice” has
the meaning set forth in Section
4.2(b).

     

    “Donor” means a human
tissue donor.

     

    “Donor Eligibility
Requirements” means the requirements set forth in 21 C.F.R. Part 1271,
subpart C, as in effect and as may be amended or replaced by the FDA from time
to time.

     

    “Donor Tissue” means
human musculoskeletal tissue, including bone and connective tissue.

     

    “Effective Date” means
the date of completion of the last Development Milestone pursuant to the
Development Plan (as those terms are defined in the Development
Agreement).

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

    

     

    “Existing MTF Technology” means (a)
for all purposes of this Agreement other than Section 
7.1(a)(ii), such
Technology, Inventions and Know-How Controlled by MTF in existence as of the
date of this Agreement (including, without limitation, all Patents), in each
case solely insofar as necessary or useful for making, using, selling, offering
to sell and importing the Matrix, and (b) solely for purposes of Section 
7.1(a)(ii), such
Technology, Inventions and Know-How Controlled by MTF in existence as of the
Effective Date (including, without limitation, all Patents), in each case solely
insofar as necessary for making, using, selling, offering to sell and importing
the Matrix.

     

    “Existing Orthofix
Technology” means (a) for all purposes of this Agreement other than Section 
7.1(b)(ii),such
Technology, Inventions and Know-How Controlled by Orthofix in existence as of
the date of this Agreement (including, without limitation, all Patents), in each
case solely insofar as necessary or useful for making, using, selling, offering
to sell and importing the Matrix, and (b) solely for purposes of Section 
7.1(b)(ii), such
Technology, Inventions and Know-How Controlled by Orthofix in existence as of
the Effective Date (including, without limitation, all Patents), in each case
solely insofar as necessary for making, using, selling, offering to sell and
importing the Matrix.

     

    “Facility” means MTF’s
facility located at 125 May Street, Suite 300, Edison, New Jersey or any other
facility of MTF where it performs any of its obligations under this
Agreement.

     

    “FDA” means the United
States Food and Drug Administration, or any successor entity.

     

    “FDCA” means the
United States Federal Food, Drug, and Cosmetic Act, as amended.

     

    “First Offer Notice”
has the meaning set forth in Section
6.2(a).

     

    “First Refusal Notice”
has the meaning set forth in Section
6.2(b).

     

    “Force Majeure Event”
has the meaning set forth in Section
17.1.

     

    “Forecast” has the
meaning set forth in Section
2.2.

     

    “HCT/P” means a human
cells, tissues, or cellular or tissue-based product that the FDA regulates
solely under Section 361 of the PHSA and the provisions of 21 C.F.R. Part
1271.

     

    “Improvement” means any enhancement,
modification, purification, optimization, or further development made under and
pursuant to this Agreement during the Term, whether or not patentable, that
results from either (a) a change to the Specifications that is agreed upon by
the Steering Committee for development under this Agreement, or (b) a new
development initiative with respect to the Matrix that is the subject of a new
development agreement mutually agreed upon by the Parties in accordance with
Section 
6.1.

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

    

     

    “Infringement Claim”
has the meaning set forth in Section
14.1.

     

    “Initial Term” has the
meaning set forth in Section
13.1.

     

    “Invention” means any
process, method, composition of matter, article of manufacture, discovery or
finding.

     

    “Know-How” means (a)
any scientific or technical information, results and data of any type
whatsoever, in any tangible or intangible form whatsoever, including databases,
practices, methods, techniques, specifications, formulations, formulae,
knowledge, know-how, skill, experience, test data including pharmacological,
medicinal chemistry, biological, chemical, biochemical, toxicological and
clinical test data, analytical and quality control data, stability data, studies
and procedures, and manufacturing process and development information, results
and data and (b) any biological, chemical or physical materials.

     

    “Laws” means all
national, federal, state, provincial and local laws, statute, rules,
regulations, ordinances, administrative order, court order, requirements and
guidance of any governmental authority or instrumentality, domestic or
otherwise, including the PHSA, the NOTA, 21 C.F.R. Parts 1270 and 1271, Human
Cells, Tissues, and Cellular or Tissue-Based Products, cGTP, state tissue
banking statutes and regulations, Donor Eligibility Requirements, and other
rules, regulations, guidance or standards promulgated or issued by any
Regulatory Authority or the AATB, as each may be amended from time to
time.

     

    “Lot” means a quantity
of the Matrix, Processed in accordance with the Specifications, resulting from a
single production run traceable to a single Donor.

     

    “Marketing Fee” has
the meaning set forth in Section 5.2.

     

    “Marketing Plan” has
the meaning set forth in Section 5.1.

     

    “Matrix” has the
meaning set forth in the Recitals.

     

    “Minimum Service Fee”
has the meaning set forth in Section 4.1(a).

     

    “Monthly Statement”
has the meaning set forth in Section
4.1(b).

     

    “MTF” has the meaning
set forth in the Preamble.

     

    “MTF Indemnitees” has
the meaning set forth in Section
14.1.

     

    “MTF Marks” has the
meaning set forth in Section 7.3(a).

     

    “MTF’s Knowledge” and
phrases of similar import mean, the actual knowledge of a particular fact of the
individuals identified on Exhibit
G

    
       

       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    

    
      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

    

     

    “NOTA” means the
United States National Organ Transplant Act, 42 U.S.C. Section
274e.

     

    “Offeree Party” has
the meaning set forth in Section
6.2(a).

     

    “Offering Party” has
the meaning set forth in Section
6.2(a).

     

    “Orthofix” has the
meaning set forth in the Preamble.

     

    “Orthofix Marks” has
the meaning set forth in Section 7.3(b).

     

    “Orthofix’s Knowledge”
and phrases of similar import mean, the actual knowledge of a particular fact of
the individuals identified on Exhibit
H.

     

    “Osiris Agreement”
means the Distribution and Supply Agreement, dated November 10, 2005, between
Osiris Therapeutics, Inc. and Orthofix.

     

    “Party” has the
meaning set forth in the Preamble.

     

    “Patent(s)” means (a)
all patents and patent applications in any country or supranational jurisdiction
and (b) any provisionals, substitutions, divisions, continuations, continuations
in part, reissues, renewals, registrations, confirmations, reexaminations,
extensions, supplementary protection certificates and the like, of any such
patents or patent applications.

     

    “Person” means an
individual, corporation, partnership, limited liability company, trust, business
trust, association, joint stock company, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, governmental authority or any other
form of entity not specifically listed herein.

     

    “PHSA” means the
United States Public Health Service Act, 42 U.S.C. §201 et seq.

     

    “Process” or “Processing” means any
or all of the acts of manufacturing (including procuring materials, and
determining suitability of Donor Tissue and Donors for manufacturing), handling,
storing, releasing, analyzing, testing, packaging, labeling and preparing for
shipment.

     

    “Product Concept” has
the meaning set forth in Section
6.2(a).

     

    “Product Concept
Proposal” has the meaning set forth in Section
6.2(a).

     

    “Proposing Party” has
the meaning set forth in Section
6.2(b).

     

    “Reasonable Commercial
Efforts” means with respect to the efforts to be expended by a Party with
respect to any objective, reasonable, good faith efforts to accomplish such
objective as such Party would normally use to accomplish a similar objective
under similar circumstances, it being understood and agreed that with respect to
the Processing or Commercialization of the Matrix, such efforts will be similar
to those efforts and resources commonly used by a Party for a similar human
tissue product owned by it or to which it has rights, which product is at a
similar stage in its development or product life and is of similar market
potential taking into account efficacy, safety, labeling, the competitiveness of
alternative products in the marketplace, the patent and other proprietary
position of the product, the likelihood of regulatory approval given the
regulatory structure involved, the commercial viability of the product,
availability of alternative products and other relevant
factors.  Reasonable Commercial Efforts may change over time,
reflecting changes in the status of the Matrix and the market
needs.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

    

     

    “Recall” has the
meaning set forth in ARTICLE
XII.

     

    “Receiving Party” has
the meaning set forth in Section
6.2(b).

     

    “Regulatory Authority”
means any government regulatory authority, domestic or otherwise with
jurisdiction over the activities of the Parties pursuant to this Agreement and
over the development, Processing, marketing, reimbursement and/or pricing of the
Matrix in the Territory, including, in the United States, the FDA.

     

    “Regulatory
Inspection” has the meaning set forth in Section
11.5.

     

    “Release Criteria” has
the meaning set forth in Section
10.1.

     

    “Service Fee” has the
meaning set forth in Section
4.1(a).

     

    “Specifications” has
the meaning set forth in the Recitals.

     

    “Steering Committee”
means the Committee described in greater detail in ARTICLE III that has
the authority set forth therein, the initial composition of which is set forth
in Exhibit
B.

     

    “Subcontracting Party”
means, with respect to any subcontractor, the Party that has engaged that
subcontractor.

     

    “Technology” means all
intellectual property rights, including but not limited to such rights with
respect to designs, prototypes, processes, drawings, descriptions, data, and
inventions, whether patentable or not.

     

    “Term” means the
Initial Term as defined in Section 13.1
hereof, and any renewal or extension of this Agreement pursuant to Section 13.1.

     

    “Territory” means all
of the countries in the world, and their territories and
possessions.

     

    “Third Party” means
any party other than Orthofix, MTF, and their respective
Affiliates.

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

      

    

     

    “Underpayment Notice”
has the meaning set forth in Section 
4.2(a).

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
A

    

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

    MTF Order Acceptance
Procedures*

    

     

    
      	
              Orders; Service Fees

              1.  All orders
      for Matrix shall be subject to MTF’s standard terms and conditions,
      including, without limitation, its standard warranty, and, subject to the
      foregoing, the terms set forth in this Exhibit A in effect on the date of
      this Agreement as from time to time revised by MTF.

              2.  All new
      customers must provide MTF with their complete bill to and ship to
      address, contact name and telephone number on company
      letterhead.

              3.  Unless
      otherwise agreed upon in writing, the Matrix will be billed at the service
      fees in effect at the time of shipment.  Service fees are
      subject to change without notice unless a definite term of effectiveness
      is otherwise stipulated by MTF. Unless otherwise specifically indicated,
      all service fees and order acknowledgements are understood to be F.O.B.
      MTF’s premises in Edison, New Jersey.

              4. Service fees and
      conditions given in MTF’s order acknowledgements are effective only for
      deliveries to be used in the country of the named customer.

              5. Service fees on the
      specified tissue and products are exclusive of all taxes, including,
      without limitation, taxes on processing, sales, receipts, gross income,
      occupation, use and similar taxes.  Whenever applicable, any tax
      or taxes will be added to the invoice as a separate charge to be paid by
      the customer.

              6.  Transportation
      and insurance of shipments shall be arranged by MTF on behalf of the
      customer at the customer’s expense and risk.

              7.  Products
      or services not stipulated in any order will be charged
      separately.

               

              Terms of Payment

              1.  Where, at
      MTF’s option, credit is extended, payment is due within thirty days after
      the date of the invoice.

              2.  All orders
      paid by credit card must have credit card pre-approval prior to
      shipment.

              3.  Unless
      otherwise specifically stipulated, all payments are to be made in United
      States currency. Payment is considered made if and to the extent that the
      aforementioned funds are placed at the unrestricted disposal of
      MTF.

              4.  The
      customer shall comply with all required dates of payment notwithstanding
      any delay in transportation, delivery or acceptance of shipments for
      reasons beyond MTF’s control.

               

              Delivery

              1. The delivery times
      indicated in MTF’s order acknowledgements are based on MTF’s ability to
      secure the necessary tissue and other materials and on processing
      conditions prevailing at that time.  In the event of changes
      occurring in any of such circumstances, MTF reserves the  right
      at any time to advise the customer of a revised time for
      delivery.

              2.  MTF will
      not recognize any claim for damages in respect of delay in
      delivery.

              3.  Shipment
      to transportation carrier’s pick-up point will be done

              when
      necessary for facilitation of delivery.

              4.  MTF will
      only ship tissue and/or tissue classified as a medical device to hospitals,
      medical offices, dental offices, and other tissue banks for frozen tissue
      storage purposes.

            	
              absolute
      property of MTF provided that the customer may be given credit therefore,
      if applicable.

               

              Return Policy

              1.  In order
      to maintain strict quality control protocols, there is a no-return policy
      for all frozen bone and frozen soft tissue.

              2.  Freeze
      dried tissue may be returned for credit under the following circumstances
      without a restocking fee: (i) the tissue does not conform to MTF’s
      warranty (if such claims are reported to MTF within thirty days of the
      date of invoice); (ii) the tissue/packaging is damaged in shipment (if
      claims for damaged tissue packages are reported to MTF within five days of
      receipt of the shipment of tissue; or (iii) order discrepancies (if
      reported to MTF within five days of receipt of the shipment of
      tissue).

              3.  All other
      return requests must be made within thirty days of the original invoice
      date and will be subject to a restocking charge of twenty percent of the
      cost of the tissue.  Freight charges will not be
      credited.

              4.  All
      returns must be accompanied by a Return Authorization Number
      (RA#).  An RA# may be obtained by contacting MTF’s Customer
      Service Advocate at 1-800-946-9008 extension 2307 (Customer Service hours
      are Monday through Friday 8:15 a.m. to 6:30 p.m. eastern
      time).

               

              Warranties

              1.  MTF’s
      standard warranty to the customer, extending to conformity of the Matrix
      to MTF’s published specifications therefor, will constitute MTF’s sole
      warranty to the customer.  MTF will make no other warranty
      or guarantee, express or implied or statutory, in fact or by operation of
      law, and MTF disclaims, without limitation, the implied warranties of
      merchantability and fitness for a particular purpose.

              2.  In the
      event that any tissue does not meet MTF’s warranty, MTF’s liability and
      the customer’s sole remedy, whether in contract, under any warranty, in
      tort (including negligence), in strict liability or otherwise, shall be
      limited, in all respects, to  reimbursement or replacement of
      the non-conforming shipment and shall not exceed the return of the amount
      of the service fee paid by the customer.

              3.  MTF
      shall not in any event be liable for damages or indemnity for direct or
      incidental, consequential or other indirect damages, including any claims
      for damages based upon lost profits, or other liabilities in any way
      arising from or sustained as a result of an order and/or the processing,
      sale, distribution or delivery of the tissue.

               

              Cancellation

              1.  If the
      customer ceases to conduct its operations in the normal course or if any
      proceeding under the bankruptcy or insolvency laws is brought by or
      against the customer or a receiver for the customer is appointed or
      applied for or an assignment is made by the customer for the benefit of
      creditors, MTF may terminate the order without liability and without
      prejudicing MTF’s rights with respect to deliveries previously
      made.

              2.  In the
      event of non-compliance by the customer with the any of MTF’s standard
      terms and conditions, MTF shall be at liberty to cancel any order or part
      thereof immediately and to demand immediate payment for shipment already
      delivered.

              3.  MTF may
      further at any time cancel an order for any other reason, including,
      without limitation, breach by the customer, with respect to tissue and
      materials not theretofore
delivered.

            

    

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    
      	
              5.  The use of
      and risk of loss to the tissue shall pass to the customer upon delivery of
      the tissue to the carrier for shipment.

              6.   MTF will
      have the right, in addition to all other rights it may possess at any
      time, for credit reasons or because of the customer’s default or defaults,
      to withhold shipments, in whole or in part, and to recall shipments in
      transit, retake shipments and repossess all tissue which is stored with
      MTF for the customer’s account without the necessity of taking any other
      proceedings and the customer consents that all shipments so recalled,
      retaken or repossessed shall become the

               

            	
               

              Other

              1.  MTF will
      not be required to accept any order which, unless waived by MTF, purports
      not to incorporate MTF’s standard terms and conditions or which provides
      for any term or condition which is inconsistent with MTF’s standard terms
      and conditions.

              2. MTF will not be
      responsible for delays caused by acts of God, official enactments,
      epidemics, mobilization, war, riots, breakdown of processing facility,
      strikes, lockouts, boycotts, or any labor issues directly or indirectly
      affecting MTF’s processing or those of its suppliers or any other event
      beyond MTF’s control.

              3.  The rights
      and duties of the parties shall be determined by the laws of the State of
      New Jersey and the customer consents and submits to the jurisdiction of
      the courts of the State of New Jersey for all purposes in connection with
      controversy, claim, action or proceeding arising out of or relating to any
      order and final judgment in any such controversy, claim, action or
      proceeding shall be conclusive and may be enforced in any other
      jurisdiction within or outside the State of New
  Jersey.

            

    

    *In the
event of any inconsistency between any provision of this Exhibit A and any
provision in the body of the Agreement, the provision in the body of the
Agreement shall control.

    

    

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
B

    

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

    Initial Steering
Committee

    

    

    

    MTF
designees

    

    Joseph
Yaccarino, Executive Vice President, Processing Operations

    Michael
Schuler, Vice President, New Business Development

    Kim
Fitzgerald, Vice President, Marketing

    

    Orthofix
designees

    

    Michael
Finegan, Vice President, Corporate Development

    Nicole
Esposito, Global Products Manager Biologics

    Raymond
Linovitz, Medical Director, Blackstone Medical

    
 

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
C

    

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

    Specifications for the
Matrix

    

    Allogeneic
cancellous bone matrix containing viable mesenchymal stem cells and/or
osteoprogenitor cells and conforming to the
following:  [*]

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
D

    

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

    Release Criteria for the
Matrix

    

    

    

    
      	
              1.

            	
              For
      each donor lot:  [*]

            

    

     

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
E

    

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

    Certificate of
Analysis

    

    CERTIFICATE
OF ANALYSIS

    

    Donor Lot
_____

    Date__________

    

    The
above-referenced Donor Lot complies with the release criteria set forth below as
indicated:

    

    

    
      	
              Criteria

            	
              Meets
      Standard

            	
              Deviates from Standard

            
	
              [*]

            	
               

            	
               

            
	
              [*]

            	
               

            	
               

            
	
              [*]

            	
               

            	
               

            
	
              [*]

            	
               

            	
               

            
	
              [*]

            	
               

            	
               

            

    

    

    
      	
               

            	
              MUSCULOSKELETAL
      TRANSPLANT

            
	
               

            	
              FOUNDATION,
      INC.

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              By

            	
               

            
	
               

            	
              Name:

            	
               

            
	
               

            	
              Title:

            	
               

            

    

    
 

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
F

    

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

    Contingency Plan for the
Matrix

    

    The
primary facility for processing the Matrix will be MTF’s facility located in
Edison, New Jersey where processing will take place in the rooms where all fresh
tissue processing currently is performed, which include the appropriate clean
rooms, equipment, and trained personnel.

    

    In the
event of a cessation of all or substantially all Processing operations with
respect to the Matrix at MTF’s Edison facility, MTF will use Reasonable
Commercial Efforts to implement the following actions in order to continue to
supply Matrix:

    

    
      	
               
      

            	
              ·

            	
              processing
      will be transferred to MTF’s facility located in Jessup, Pennsylvania
      (expected completion, 1/2009);

            

    

    

    
      	
               
      

            	
              ·

            	
              any
      specialized equipment for Matrix processing will be duplicated in the
      Jessup facility;

            

    

    

    
      	
               
      

            	
              ·

            	
              MTF’s
      trained personnel from the Edison facility will work in the Jessup
      facility and train Jessup personnel until the Jessup facility’s processing
      capabilities is operational and Jessup personnel are
    trained;

            

    

    

    
      	
               
      

            	
              ·

            	
              usable
      work in process and finished goods inventory will be relocated to Jessup;
      and

            

    

    

    
      	
               
      

            	
              ·

            	
              order
      fulfillment will be relocated to the Jessup
  facility.

            

    

     

    
       

      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
 

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
G

    

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

    MTF’s
Knowledge

    

    
      	
               
      

            	
              Arthur
      A. Gertzman, Executive Vice President, Research and Development and Chief
      Science Officer

            

    

    
      	
               
      

            	
              Michael
      Schuler, Vice President, New Business
  Development

            

    

    

    

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
H

    

    MATRIX
COMMERCIALIZATION COLLABORATION AGREEMENT

    Orthofix’s
Knowledge

    

    Michael
M. Finegan, Vice President of Corporate Development

    Raymond
Linovitz, Medical Director, Blackstone Medical

    Raymond
C. Kolls, Senior Vice President, General Counsel and Corporate
Secretary

    

    

     

    
      
        

      

      
        
          [*]  Certain
confidential information contained in this document, marked with an asterisk in
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        

      

    

     

     

    
      7ex4_1.htm

    
      
Exhibit 4.1

     

    
      THE
REGISTERED HOLDER OF THIS PURCHASE WARRANT, BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN
PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL
NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A
PERIOD OF ONE HUNDRED EIGHTY DAYS (180 DAYS) FOLLOWING THE EFFECTIVE DATE
(DEFINED HEREIN) TO ANYONE OTHER THAN (I) MERRIMAN CURHAN FORD & CO. OR AN
UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING (DEFINED
HEREIN), OR (II) A BONA FIDE OFFICER OR PARTNER OF MERRIMAN CURHAN FORD &
CO. OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

      

      THIS
PURCHASE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER
APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

      

      THIS
PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO _________, 2010. VOID AFTER 5:00
P.M. EASTERN TIME, ______, 2013.

      

      COMMON
STOCK PURCHASE WARRANT

      

      For
the Purchase of

      

      ________
shares of Common Stock

      

      of

      

      Procera
Networks, Inc.

      

      

      1.       
     Purchase
Warrant.

      

      THIS
CERTIFIES THAT, in consideration of $1.00 duly paid by or on behalf of Merriman
Curhan Ford & Co. (“Holder”), as registered owner
of this Purchase Warrant, to Procera Networks, Inc. (the “Company”), Holder is entitled,
at any time or from time to time from ________, 2010 (the “Commencement Date”), and at or
before 5:00 p.m., Eastern Time,  ______, 2013 (the “Expiration Date”), but not
thereafter, to subscribe for, purchase and receive, in whole or in part, up to
_____________ shares (the “Shares”) of common stock, par
value $0.001 per share of the Company (“Common Stock”) subject to
adjustment as provided in Section 6 hereof.  If the Expiration Date is
a day on which banking institutions are authorized by law to close, then this
Purchase Warrant may be exercised on the next succeeding day which is not such a
day in accordance with the terms herein. During the period commencing on the
Commencement Date and ending on the Expiration Date, the Company agrees not to
take any action that would terminate the Purchase Warrant. This Purchase Warrant
is initially exercisable at $0.40 per Share so purchased; provided, however,
that upon the occurrence of any of the events specified in Section 6 hereof, the
rights granted by this Purchase Warrant, including the exercise price per Share
and the number of Shares to be received upon such exercise, shall be adjusted as
therein specified. The term “Exercise Price” shall mean the
initial exercise price or the adjusted exercise price, depending on the
context.

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      2.      
      Exercise.

      

      2.1      
     Exercise Form. In
order to exercise this Purchase Warrant, the exercise form attached hereto must
be duly executed and completed and delivered to the Company, together with this
Purchase Warrant and payment of the Exercise Price for the Shares being
purchased payable in cash (unless exercised pursuant to the terms of Section 2.3
below) by wire transfer of immediately available funds to an account designated
by the Company or by certified check or official bank check. If the subscription
rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern
time, on the Expiration Date, this Purchase Warrant shall become and be void
without further force or effect, and all rights represented hereby shall cease
and expire.

      

      2.2      
     Legend.  Each
certificate for the securities purchased under this Purchase Warrant shall bear
a legend as follows unless such securities have been registered under the
Securities Act of 1933, as amended (the “Act”):

      

      “The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Act”) or applicable state law.
Neither the securities nor any interest therein may be offered for sale, sold or
otherwise transferred except pursuant to an effective registration statement
under the Act, or pursuant to an exemption from registration under the Act and
applicable state law.”

      

      2.3      
     Cashless
Exercise.

      

      2.3.1         Determination of
Amount.  In lieu of the payment of the Exercise Price
multiplied by the number of Shares which this Purchase Warrant is exercisable in
the manner required by Section 2.1, the Holder shall have the right (but not the
obligation) to convert any exercisable but unexercised portion of this Purchase
Warrant into Shares (“Conversion Right”) as
follows:  upon exercise of the Conversion Right, the Company shall
deliver to the Holder (without payment by the Holder of any of the Exercise
Price in cash) that number of Shares equal to the quotient obtained by dividing
(x) the “Value” (as defined below) of the portion of the Purchase Warrant being
converted by (y) the Current Market Price per Share (as defined below). The
“Value” of the portion
of the Purchase Warrant being converted shall equal the remainder derived from
subtracting (a) (i) the Exercise Price multiplied by (ii) the number of Shares
underlying the portion of this Purchase Warrant being converted from (b) the
Current Market Price of a Share multiplied by the number of Shares underlying
the portion of the Purchase Warrant being converted. As used herein, the term
“Current Market Price”
per Share at any date shall mean (i) if the Shares are listed on a national
securities exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market
or NASD OTC Bulletin Board (or successor exchange), the last sale price of the
Shares in the principal trading market for the Shares as reported by the
exchange, Nasdaq or the NASD, as the case may be, on the last trading day
preceding the date in question; (ii) if the Shares are not listed on a national
securities exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market
or the NASD OTC Bulletin Board (or successor exchange), but is traded in the
residual over-the-counter market, the closing bid price for the Shares on the
last trading day preceding the date in question for which such quotations are
reported by the Pink Sheets, LLC or similar publisher of such quotations; and
(iii) if the fair market value of the Shares cannot be determined pursuant to
clause (i) or (ii) above, such price as the Board of Directors of the Company
shall determine, in good faith.

      

      2.3.2         Mechanics of Cashless
Exercise.  The cashless exercise right may be exercised by the
Holder on any business day on or after the Commencement Date and not later than
the Expiration Date by delivering the Purchase Warrant with the duly executed
exercise form attached hereto with the cashless exercise section completed to
the Company, exercising the cashless exercise right and specifying the total
number of Shares the Holder will purchase pursuant to such cashless exercise
right.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      3.       
      Transfer.

      

      3.1      
     General Restrictions.
The registered Holder of this Purchase Warrant agrees by his, her or its
acceptance hereof, that such Holder will not: (a) sell, transfer, assign, pledge
or hypothecate this Purchase Warrant for a period of one hundred eighty days
(180 days) following the Commencement Date to anyone other than: (i) Merriman
Curhan Ford & Co. (“Merriman”) or an underwriter
or a selected dealer participating in the offering of common stock which this
Purchase Warrant is being issued in connection with, or (ii) a bona fide officer
of Merriman or of any such underwriter or selected dealer, in each case in
accordance with FINRA Rule 5110(g)(1) or (b) cause this Purchase Warrant or the
securities issuable hereunder to be the subject of any hedging, short sale,
derivative, put or call transaction that would result in the effective economic
disposition of this Purchase Warrant or the securities hereunder, except as
provided for in FINRA Rule 5110(g)(2). On and after one hundred eighty days (180
days) from the Commencement Date, transfers to others may be made subject to
compliance with or exemptions from applicable securities laws. In order to make
any permitted assignment, the Holder must deliver to the Company the assignment
form attached hereto duly executed and completed, together with the Purchase
Warrant and payment of all transfer taxes, if any, payable in connection
therewith. The Company shall, within five business days, transfer this Purchase
Warrant on the books of the Company and shall execute and deliver a new Purchase
Warrant or Purchase Warrants of like tenor to the appropriate assignee(s)
expressly evidencing the right to purchase the aggregate number of Shares
purchasable hereunder or such portion of such number as shall be contemplated by
any such assignment.

      

      3.2       
    Restrictions Imposed by the
Act. The securities evidenced by this Purchase Warrant shall not be
transferred unless and until: (i) the Company has received the opinion of
counsel for the Holder that the securities may be transferred pursuant to an
exemption from registration under the Act and applicable state securities laws,
the availability of which is established to the reasonable satisfaction of the
Company (the Company hereby agreeing that the opinion of Loeb & Loeb LLP
shall be deemed satisfactory evidence of the availability of an exemption), or
(ii) a registration statement or a post-effective amendment to the registration
statement relating to the offer and sale of such securities has been filed by
the Company and declared effective by the Securities and Exchange Commission
(the “Commission”) and
compliance with applicable state securities law has been
established.

      

      

      3.3        
   Holder
Representations.  The Holder hereby represents and warrants to
the Company as follows:

      

      (a)  This
Warrant and the securities to be acquired upon exercise of this Warrant by
Holder will be acquired for investment for Holder’s account, not as a nominee or
agent, and not with a view to the public resale or distribution within the
meaning of the Act.

      

      (b)  Holder
has received or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect to
the acquisition of this Warrant and its underlying securities.  Holder
further has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of this Warrant and
its underlying securities and to obtain additional information necessary to
verify any information furnished to Holder or to which Holder has
access.

      

      (c)  Holder
understands that the purchase of this Warrant and its underlying securities
involves substantial risk.  Holder has experience as an investor in
securities of companies in the development stage and acknowledges that Holder
can bear the economic risk of such Holder’s investment in this Warrant and its
underlying securities and has such knowledge and experience in financial or
business matters that Holder is capable of evaluating the merits and risks of
its investment in this Warrant and its underlying securities and/or has a
preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables Holder to be aware of the character, business acumen and financial
circumstances of such persons.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (d)  Holder
is an “accredited investor” within the meaning of Regulation D promulgated under
the Act.

      

      

      4.         
   New
Purchase Warrant to be Issued.

      

      4.1   
        Partial Exercise or
Transfer. Subject to the restrictions in Section 3 hereof, this Purchase
Warrant may be exercised or assigned in whole or in part. In the event of the
exercise or assignment hereof in part only, upon surrender of this Purchase
Warrant for cancellation, together with the duly executed exercise or assignment
form and funds sufficient to pay any Exercise Price and/or transfer tax if
exercised pursuant to Section 2.1 hereto, the Company shall cause to be
delivered to the Holder without charge a new Purchase Warrant of like tenor to
this Purchase Warrant in the name of the Holder evidencing the right of the
Holder to purchase the number of Shares purchasable hereunder as to which this
Purchase Warrant has not been exercised or assigned.

      

      4.2        
   Lost
Certificate. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Purchase Warrant and of
reasonably satisfactory indemnification or the posting of a bond, the Company
shall execute and deliver a new Purchase Warrant of like tenor and date. Any
such new Purchase Warrant executed and delivered as a result of such loss,
theft, mutilation or destruction shall constitute a substitute contractual
obligation on the part of the Company.

      

      5.         
   Adjustments.

      

      5.1      
     Adjustments to Exercise
Price and Number of Shares. The Exercise Price and the number of Shares
underlying the Purchase Warrant shall be subject to adjustment from time to time
as hereinafter set forth:

      

      5.1.1         Stock Dividends; Split
Ups. If after the date hereof, and subject to the provisions of Section
5.3 below, the number of outstanding shares of Common Stock of the Company is
increased by a stock dividend payable in shares or by a split up of shares or
other similar event, then, on the effective day thereof, the number of Shares of
the Company purchasable hereunder shall be increased in proportion to such
increase in outstanding shares of Common Stock.

      

      5.1.2         Aggregation of
Shares. If after the date hereof, and subject to the provisions of
Section 5.3, the number of outstanding shares of Common Stock is decreased by a
consolidation, combination or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of Shares
purchasable hereunder shall be decreased in proportion to such decrease in
outstanding shares of Common Stock.

      

      5.1.3         Replacement of Securities
upon Reorganization, etc. In case of any reclassification or
reorganization of the outstanding shares of Common Stock other than a change
covered by Section 5.1.1 or 5.1.2 hereof or that solely affects the par value of
such shares, or in the case of any share reconstruction or amalgamation or
consolidation of the Company with or into another corporation (other than a
consolidation or share reconstruction or amalgamation in which the Company is
the continuing corporation and that does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), or in the case of any
sale or conveyance to another corporation or entity of the property of the
Company as an entirety or substantially as an entirety in connection with which
the Company is dissolved, the Holder of this Purchase Warrant shall have the
right thereafter (until the expiration of the right of exercise of this Purchase
Warrant) to receive upon the exercise hereof, for the same aggregate Exercise
Price payable hereunder immediately prior to such event, the kind and amount of
shares of stock or other securities or property (including cash) receivable upon
such reclassification, reorganization, share reconstruction or amalgamation, or
consolidation, or upon a dissolution following any such sale or transfer, by a
Holder of the number of Shares obtainable upon exercise of this Purchase Warrant
immediately prior to such event; and if any reclassification also results in a
change in Shares covered by Section 5.1.1 or 5.1.2, then such adjustment shall
be made pursuant to Sections 5.1.1, 5.1.2 and this Section 5.1.3. The provisions
of this Section 5.1.3 shall similarly apply to successive reclassifications,
reorganizations, share reconstructions or amalgamations, or consolidations,
sales or other transfers.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      5.1.4         Changes in Form of Purchase
Warrant. This form of Purchase Warrant need not be changed because of any
change pursuant to this Section, and any Purchase Warrant issued after such
change may state the same Exercise Price and the same number of Shares as are
stated in any Purchase Warrant initially issued.. The acceptance by any Holder
of the issuance of a new Purchase Warrant reflecting a required or permissive
change shall not be deemed to waive any rights to an adjustment occurring after
the Commencement Date or the computation thereof.

      

      5.2          
 Substitute
Purchase Warrant. In case of any consolidation of the Company with, or
share reconstruction or amalgamation of the Company with or into, another
corporation (other than a consolidation or share reconstruction or amalgamation
which does not result in any reclassification or change of the outstanding
Shares), the corporation formed by such consolidation or share reconstruction or
amalgamation shall execute and deliver to the Holder a supplemental Purchase
Warrant providing that the holder of each Purchase Warrant then outstanding or
to be outstanding shall have the right thereafter (until the stated expiration
of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant,
the kind and amount of shares of stock and other securities and property
receivable upon such consolidation or share reconstruction or amalgamation, by a
holder of the number of Shares for which such Purchase Warrant might have been
exercised immediately prior to such consolidation, share reconstruction or
amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide
for adjustments which shall be identical to the adjustments provided in Section
5.1. The above provision of this Section shall similarly apply to successive
consolidations or share reconstructions or amalgamations.

      

      5.3           
Elimination of
Fractional Interests. The Company shall not be required to issue
certificates representing fractions of Shares upon the exercise of this Purchase
Warrant, nor shall it be required to issue scrip or pay cash in lieu of any
fractional interests, it being the intent of the parties that all fractional
interests shall be eliminated by rounding any fraction up or down, as the case
may be, to the nearest whole number of Shares or other securities, properties or
rights.

      

      6.         
   Reservation and
Listing. The Company shall at all times reserve and keep available out of
its authorized shares of Common Stock, solely for the purpose of issuance upon
exercise of the Purchase Warrants or any substitute Purchase Warrants issued
pursuant to Section 5, such number of Shares or other securities, properties or
rights as shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Purchase Warrants and payment of the Exercise
Price therefor, in accordance with the terms hereby, all Shares and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any
stockholder.  As long as the Purchase Warrants shall be outstanding,
the Company shall use its best efforts to cause all Shares issuable upon
exercise of the Purchase Warrants to be listed (subject to official notice of
issuance) on all securities exchanges (or, if applicable on the Nasdaq Global
Market, the Nasdaq Capital Market, the OTC Bulletin Board or any successor
trading market) on which the shares of Common Stock may then be listed and/or
quoted.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      7.       
     Certain Notice
Requirements.

      

      7.1         
  Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring
upon the Holders the right to vote or consent or to receive notice as a
stockholder for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Purchase Warrants and their exercise, any of the
events described in Section 7.2 shall occur, then, in one or more of said
events, the Company shall give written notice of such event at least fifteen
days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of the
closing of the transfer books, as the case may be. Notwithstanding the
foregoing, the Company shall deliver to each Holder a copy of each notice given
to the other stockholders of the Company at the same time and in the same manner
that such notice is given to the stockholders.

      

      7.2       
    Events Requiring
Notice. The Company shall be required to give the notice described in
this Section 7 upon one or more of the following events: (i) if the Company
shall take a record of the holders of its shares of Common Stock for the purpose
of entitling them to receive a dividend or distribution payable otherwise than
in cash, or a cash dividend or distribution payable otherwise than out of
retained earnings, as indicated by the accounting treatment of such dividend or
distribution on the books of the Company, (ii) the Company shall offer to all
the holders of its shares of Common Stock any additional shares of capital stock
of the Company or securities convertible into or exchangeable for shares of
capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or share reconstruction or
amalgamation) or a sale of all or substantially all of its property, assets and
business shall be proposed.

      

      7.3       
    Notice of Change in Exercise
Price. The Company shall, promptly after an event requiring a change in
the Exercise Price pursuant to Section 5 hereof, send notice to the Holders of
such event and change (“Price
Notice”). The Price Notice shall describe the event causing the change
and the method of calculating same and shall be certified as being true and
accurate by the Company’s President and Chief Financial Officer.

      

      7.4        
   Transmittal of
Notices. All notices, requests, consents and other communications under
this Purchase Warrant shall be in writing and shall be deemed to have been duly
made when hand delivered, or mailed by express mail or private courier service:
(i) If to the registered Holder of the Purchase Warrant, to the address of such
Holder as shown on the books of the Company, or (ii) if to the Company, to the
following address or to such other address as the Company may designate by
notice to the Holders:

      

      Procera
Networks, Inc.

      100-C
Cooper Court

      Los
Gatos, California 95032

      

      

      8.          
  Miscellaneous.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      8.1       
    Amendments. The
Company and Merriman may from time to time supplement or amend this Purchase
Warrant without the approval of any of the Holders in order to cure any
ambiguity, to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder that the Company
and Merriman may deem necessary or desirable and that the Company and Merriman
deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of and be signed
by the party against whom enforcement of the modification or amendment is
sought.

      

      8.2     
      Headings. The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of this Purchase Warrant.

      

      8.3.           Entire Agreement.
This Purchase Warrant (together with the other agreements and documents being
delivered pursuant to or in connection with this Purchase Warrant) constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.

      

      8.4       
    Binding Effect. This
Purchase Warrant shall inure solely to the benefit of and shall be binding upon,
the Holder and the Company and their permitted assignees, respective successors,
legal representative and assigns, and no other person shall have or be construed
to have any legal or equitable right, remedy or claim under or in respect of or
by virtue of this Purchase Warrant or any provisions herein
contained.

      

      8.5      
     Governing Law; Submission to
Jurisdiction. This Purchase Warrant shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
giving effect to conflict of laws. The Company hereby agrees that any action,
proceeding or claim against it arising out of, or relating in any way to this
Purchase Warrant shall be brought and enforced in the courts of the State of New
York or of the United States District Court for the Southern District of New
York, and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum. Any process
or summons to be served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 7 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim. The Company and the Holder agree
that the prevailing party(ies) in any such action shall be entitled to recover
from the other party(ies) all of its reasonable attorneys’ fees and expenses
relating to such action or proceeding and/or incurred in connection with the
preparation therefor.

      

      8.6       
    Waiver, etc. The
failure of the Company or the Holder to at any time enforce any of the
provisions of this Purchase Warrant shall not be deemed or construed to be a
waiver of any such provision, nor to in any way affect the validity of this
Purchase Warrant or any provision hereof or the right of the Company or any
Holder to thereafter enforce each and every provision of this Purchase Warrant.
No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Purchase Warrant shall be effective unless set forth in a
written instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or
non-fulfillment.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by
its duly authorized officer as of the ___ day of _________, 2010.

      

      

      
        	 
      	
                PROCERA
      NETWORKS, INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                MERRIMAN
      CURHAN FORD & CO.

              
	 
      	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      Form to
be used to exercise Purchase Warrant:

      

      Procera
Networks, Inc.

      100-C
Cooper Court

      Los
Gatos, California 95032

      Attn:
[             ]

      

      

      Date:
__________, 201__

      

      

      The
undersigned hereby elects irrevocably to exercise the within Purchase Warrant
and to purchase ______ Shares ofProcera Networks, Inc. and hereby makes payment
of $ ___________  (at the rate of $________ per Share) in payment of
the Exercise Price pursuant thereto. Please issue the Shares as to which this
Purchase Warrant is exercised in accordance with the instructions given
below.

      

      or

      

      The
undersigned hereby elects irrevocably to convert its right to purchase ______
Shares purchasable under the within Purchase Warrant by surrender of the
unexercised portion of the attached Purchase Warrant (with a “Value” of $______
based on a “Market Price” of $______). Please issue the Shares as to which this
Purchase Warrant is exercised in accordance with the instructions given
below.

      

      

      
        	 
      	 
      
	
                Signature

              	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                Signature
      Guaranteed

              	 
      

      

      

      

      INSTRUCTIONS
FOR REGISTRATION OF SECURITIES

      

      Name:

      

      

      
        	 
      	 
      
	
                (Print
      in Block Letters)

              	 
      

      

      

      Address:

      

      

      NOTICE:
The signature to this form must correspond with the name as written upon the
face of the within Purchase Warrant in every particular without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank, other
than a savings bank, or by a trust company or by a firm having membership on a
registered national securities exchange.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      Form to
be used to assign Purchase Warrant:

      

      ASSIGNMENT

      

      (To be
executed by the registered Holder to effect a transfer of the within Purchase
Warrant):

      

      

      FOR VALUE
RECEIVED, _________________________________________ does hereby sell, assign and
transfer unto _____________________________________________the right to purchase
Shares of Procera Networks, Inc. (“Company”) evidenced by the within Purchase
Warrant and does hereby authorize the Company to transfer such right on the
books of the Company.

      

      

      Dated:
_____________, 201_

      

      

      
        	 
      	 
      
	
                Signature

              	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                Signature
      Guaranteed

              	 
      

      

      

      

      NOTICE:
The signature to this form must correspond with the name as written upon the
face of the within Purchase Warrant in every particular without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank, other
than a savings bank, or by a trust company or by a firm having membership on a
registered national securities exchange.

       

       

      10

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