Document:

Debtor-In-Possession Loan, Security and Guaranty Agreement

 Exhibit 10.1 
 DEBTOR-IN-POSSESSION LOAN, SECURITY AND GUARANTY AGREEMENT 
 This
DEBTOR-IN-POSSESSION LOAN, SECURITY AND GUARANTY AGREEMENT, dated as of April 27, 2011, is entered into by and among Seahawk Drilling, Inc., a Delaware corporation (the “Borrower”), and Seahawk Drilling LLC, a Delaware
limited liability company, Seahawk Global Holdings LLC, a Delaware limited liability company, Seahawk Mexico Holdings LLC, a Delaware limited liability company, Seahawk Drilling Management LLC, a Delaware limited liability company, Seahawk Offshore
Management LLC, a Delaware limited liability company, Energy Supply International LLC, a Delaware limited liability company, and Seahawk Drilling USA LLC, a Delaware limited liability company (collectively, the “Guarantors”), and
Hayman Capital Master Fund, L.P. (the “Lender”). 
 RECITALS 

A. The Borrower and the Guarantors are debtors-in-possession under Chapter 11 of the Bankruptcy Reform Act of 1978, 11 U.S.C.
§§ 101 et seq., as amended (the “Bankruptcy Code”) in cases (the “Chapter 11 Cases”) pending in the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division (the
“Bankruptcy Court”). 
 B. The Borrower requested that the Lender provide term loans (on a senior
super-priority secured basis) to the Borrower to finance the orderly wind down of the bankruptcy estates of the Borrower and the Guarantors. 
 C. The Lender has agreed to make term loans to the Borrower subject to the terms and conditions of this Agreement and to the terms and conditions of the DIP Orders. 

AGREEMENT 
 In consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows: 
 ARTICLE I 
 DEFINITIONS 
 Section 1.01 Terms Defined Above. As used in this
Agreement, each term defined above has the meaning indicated above. 
 Section 1.02 Certain Defined Terms. As used
in this Agreement, the following terms have the meanings specified below: 
 “Act” has the meaning assigned to
such term in Section 12.13. 
 “Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. 

 “Agreement” means this Debtor-in-Possession Loan, Security and Guaranty
Agreement, as the same may from time to time be amended, modified, supplemented or restated. 
 “APA” has the
meaning assigned to such term in Section 6.01(f). 
 “Applicable Percentage” has the meaning assigned to
such term in Section 3.02. 
 “Assigned Contracts” means, collectively, all of each Loan Party’s
rights and remedies under, and all moneys and claims for money due or to become due to such Loan Party under the Escrow Agreement and the APA, and any other contracts, and any and all amendments, supplements, extensions, and renewals thereof
including all rights and claims of each Loan Party now or hereafter existing: (i) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (ii) for
any damages arising out of or for breach or default under or in connection with any of the foregoing contracts; (iii) to all other amounts from time to time paid or payable under or in connection with any of the foregoing agreements; or
(iv) to exercise or enforce any and all covenants, remedies, powers and privileges thereunder. 
 “Balance
Due” has the meaning assigned to such term in Section 3.01(a). 
 “Bankruptcy Code” has the
meaning assigned to such term in paragraph A. of the Recitals. 
 “Bankruptcy Court” has the meaning assigned
to such term in paragraph A. of the Recitals. 
 “Bankruptcy Court Schedules” has the meaning assigned to such
term in Section 7.04. 
 “Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority. 
 “Borrower” has the meaning assigned to such term
in the initial paragraph hereof. 
 “Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Houston, Texas are authorized or required by law to remain closed. 

“Capital Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance
with GAAP, recorded as capital leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent thereunder. 
 “Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing. 

“Carve-Out” means, following the occurrence and during the continuance of an Event of Default, an amount sufficient for
payment of (x) allowed professional fees and disbursements 

  
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incurred by professionals retained by the Borrower and the Guarantors and the official committee of unsecured creditors and the official committee of equity holders appointed in the Chapter 11
Cases in an aggregate amount not to exceed $2,250,000, and (y) fees pursuant to 28 U.S.C. § 1930 and any fees payable to the clerk of the Bankruptcy Court; provided that, so long as no Event of Default has occurred, the Borrower and
the Guarantors shall be permitted to pay fees and expenses allowed and payable under 11 U.S.C. § 330 and § 331 to the extent such fees and expenses are specifically identified in the Wind Down Budget, as the same may become due and
payable, and the same shall not reduce the Carve-Out. 
 “Cash Collateral Order” means any order of the
Bankruptcy Court in any Chapter 11 Case authorizing the use of cash collateral, as such order may be amended, modified or revised from time to time. 
 “Casualty Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any
property of the Borrower or any of its Subsidiaries. 
 “Change in Law” means (a) the adoption of any law,
rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement, or (c) compliance by the
Lender with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. 
 “Chapter 11 Cases” has the meaning assigned to such term in paragraph A. of the Recitals. 
 “Claims” means any and all claims, demands, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, awards, remedial response costs, expenses or disbursements of
any kind or nature whatsoever (including reasonable attorneys’, accountants’, consultants’ or paralegals’ fees and expenses), whether arising under or in connection with the Loan Documents, any applicable law, or otherwise, that
may now or hereafter be suffered or incurred by a Person and whether suffered or incurred in or as a result of any investigation, litigation, arbitration or judicial or non-judicial proceeding, or any appeal related thereto. 

“Closing Date” means the date on which the conditions specified in Section 6.01 are satisfied. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute. 

“Collateral” means all property and assets of each Loan Party and its estate of every kind or type whatsoever, tangible,
intangible, real, personal and mixed, whether now owned or existing or hereafter acquired or arising and regardless of where located, whether within the United States or in other locations, and including all of such Loan Party’s now owned or
hereafter acquired right, title and interest in and to each of the following: 
 (a) all Accounts; 

  
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 (b) all books and records; 

(c) all Chattel Paper (whether tangible or electronic); 
 (d) all Commercial Tort Claims; 
 (e) all Deposit Accounts; 

(f) all Documents; 
 (g) all Equipment; 
 (h) all Fixtures; 

(i) all General Intangibles and Payment Intangibles; 
 (j) all Goods; 
 (k) all Instruments; 

(l) all Trademarks, Copyrights, Patents and other Intellectual Property; 

(m) all Inventory; 
 (n) all Investment Property; 
 (o) all Letter-of-Credit Rights and Supporting
Obligations; 
 (p) all cash and cash equivalents; 
 (q) all real property; 
 (r) all Subject Hercules Common Stock and all other
Pledged Collateral; 
 (s) all Assigned Contracts; 
 (t) all property of the estate of each Loan Party (within the meaning Section 541 of the Bankruptcy Code, including avoidance actions arising under Chapter 5 of the Bankruptcy Code) and all other
property of each Loan Party, wherever located and whether now or hereafter existing, and whether now owned or hereafter acquired, of every kind and description, whether tangible or intangible, including money and all property of any Loan Party held
by the Lender, including all property of every description, in the possession or custody of or in transit to the Lender for any purpose, including safekeeping, collection or pledge, for the account of such Loan Party, or as to which such Loan Party
may have any right or power; 
 (u) to the extent not otherwise included, all monies and other property of any kind which is
received by any Loan Party in connection with refunds with respect to taxes, assessments and governmental charges imposed on such Loan Party or any of its property or income; 

  
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 (v) to the extent not otherwise included, all causes of action and all monies and other
property of any kind received therefrom, and all monies and other property of any kind recovered by any Loan Party; and 
 (w)
all Proceeds, products, rents and profits, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing, and any and all tangible or intangible property resulting from the sale,
exchange, collection, or other disposition of any of the foregoing, or any portion thereof or interest therein, and the Proceeds thereof; 
 provided, that all capitalized terms used in this definition of “Collateral” that are defined in Article 9 of the Uniform Commercial Code as in effect in the State of New York (the
“UCC”) shall have the meanings ascribed to such terms in the UCC; and 
 provided, further, that
Collateral shall not include (i) any property or rights conveyed or to be conveyed to the Purchasers (as such term is defined in the APA as in effect on the date hereof) or to an Affiliate (as such term is defined in the APA as in effect on the
date hereof) of the Purchasers (as provided in Section 12.8 of the APA as in effect on the date hereof) under the APA or (ii) the Subject Property unless, on the effective date of the Reorganization Plan, there are funds remaining in the
Subject Bank Account that are then no longer payable to the Person for whom they were earmarked, in which case such remaining funds shall no longer be deemed to be Subject Property but shall at such time be deemed to be Collateral. 

“Collateral Disposition” has the meaning assigned to such term in Section 3.02. 

“Confirmation Order” means an order entered by the Bankruptcy Court confirming a Reorganization Plan, which shall be in
form and substance acceptable to the Lender, in its discretion. 
 “Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. For the purposes of this definition, and without limiting the
generality of the foregoing, any Person that owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of the directors or other governing body of a Person (other than as a limited partner of such
other Person) will be deemed to “control” such other Person. “Controlling” and “Controlled” have meanings correlative thereto. 
 “Debt” means, for any Person, the sum of the following (without duplication): (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances,
debentures, notes or other similar instruments; (b) all obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts payable and all accrued
expenses, liabilities or other obligations of such Person to pay the deferred purchase price of property or services; (d) all obligations under Capital Leases; (e) all Debt (as defined in the other clauses of this definition) of others
secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) a Lien on any property of such Person, whether or not such Debt is assumed by such Person; (f) all Debt (as defined in the other
clauses of this definition other than this clause (f)) of 

  
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others guaranteed by such Person or in which such Person otherwise assures a creditor against loss of the Debt (howsoever such assurance shall be made) to the extent of the lesser of the amount
of such Debt and the maximum stated amount of such guarantee or assurance against loss; (g) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the
Debt or property of others; (h) obligations to deliver commodities, goods or services in consideration of one or more advance payments; (i) obligations to pay for goods or services even if such goods or services are not actually received
or utilized by such Person; and (j) any Debt (as defined in the other clauses of this definition) of a partnership for which such Person is liable either by agreement, by operation of law or by a Governmental Requirement but only to the extent
of such liability. 
 “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. 
 “DE Shaw DIP
Facility” means the Debtor-in-Possession Credit Agreement, dated as of February 11, 2011, among the Borrower, the lenders party thereto and D.E. Shaw Direct Capital Portfolios, L.L.C., as administrative agent. 

“DIP Orders” means, collectively, the Interim Order and the Final Order. 

“dollars” or “$” refers to lawful money of the United States of America. 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of the United States of America or any state
thereof or the District of Columbia. 
 “Equity Interests” means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest. 
 “Escrow Agent” means U.S. Bank National Association. 

“Escrow Agreement” means the Escrow Agreement entered into in connection with the APA by and among the Borrower,
Hercules and the Escrow Agent in the form of Exhibit B hereto, with such amendments or other modifications thereto that do not adversely impact the Lender’s Lien on any of the Subject Hercules Common Stock or any of the rights or remedies of
the Lender under this Agreement. 
 “Event of Default” has the meaning assigned to such term in
Section 10.01. 
 “Excepted Liens” means, with respect to any Collateral: (a) Liens for Taxes,
assessments or other governmental charges or levies which are not delinquent or which are being contested in good faith by appropriate action as to which the stay pursuant to the Chapter 11 Cases is effective; (b) Liens in connection with
workers’ compensation, unemployment insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action; (c)(i) statutory landlord’s
liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens arising by operation of law in the ordinary course

  
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of business each of which is in respect of obligations that are not delinquent or which are being contested in good faith by appropriate action; (ii) Liens arising out of crew’s wages,
repairs, supplies, towage, use of drydock or marine railway or necessaries, and other similar maritime liens (other than those described elsewhere in this definition of “Excepted Liens”), in any event, to the extent such Liens arise in the
ordinary course of business and secure payment of obligations not more than 30 days past due or which are being contested in good faith and, if necessary, by appropriate proceedings diligently conducted; (d) Liens arising solely by virtue of
any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution; provided that no such
deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board and no such deposit account is intended by Borrower or any of
its Subsidiaries to provide collateral to the depository institution; and (e) easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any property of the Borrower or any Subsidiary for the purpose of
roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and
equipment, that do not secure any monetary obligations and which in the aggregate do not materially impair the use of such property for the purposes of which such property is held by the Borrower or any Subsidiary or materially impair the value of
such property subject thereto; provided that Liens described in clauses (a) through (d) shall remain “Excepted Liens” only for so long as no action to enforce such Lien has been commenced and no intention to subordinate
the first priority Lien granted in favor of the Lender is to be hereby implied or expressed by the permitted existence of such Excepted Liens. 
 “Excess Amount” has the meaning assigned to such term in Section 3.04(b). 
 “Excluded Taxes” means (a) taxes imposed on (or measured by) its net income or profits (however denominated) or franchise taxes imposed on it by the United States of America or such
other jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of the Lender, in which its applicable lending office is located, or
(b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in the immediately preceding subclause (a). 

“Final Order” has the meaning assigned to such term in Section 10.01(j). 

“Foreign Subsidiary” means any subsidiary of the Borrower that is organized under the laws of a jurisdiction other than
the laws of the United States of America or any state thereof or the District of Columbia. 
 “GAAP” means
generally accepted accounting principles in the United States of America as in effect from time to time. 

“Governmental Authority” means the government of the United States of America, any other nation or any political
subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government. 

  
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 “Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, rules of common law, authorization or other directive or requirement, whether now or hereinafter in effect, of any Governmental Authority,
including any such Governmental Requirement relating to offshore drilling. 
 “Guaranteed Indebtedness” has the
meaning assigned to such term in Section 11.01. 
 “Guarantors” has the meaning assigned to such term in
the initial paragraph hereof. 
 “Hercules” has the meaning assigned to such term in Section 6.01(f).

 “Hercules Common Stock” has the meaning assigned to such term in Section 3.01(b). 

“Highest Lawful Rate” means the maximum nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Loans or on other Indebtedness under laws applicable to the Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than applicable laws allow as of the date hereof. 

“Indebtedness” means any and all amounts owing or to be owing by any Loan Party or any Subsidiary (whether direct or
indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising): (a) to the Lender under any Loan Document, and (b) all renewals, extensions and/or rearrangements of any
of the above. 
 “Indemnified Taxes” means Taxes other than Excluded Taxes. 

“Information” has the meaning assigned to such term in Section 12.10. 

“Interim Order” has the meaning assigned to such term in Section 6.01(c). 

“Lien” means any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of
the property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. 

“Loan Documents” means this Agreement and any other agreement, instrument or document executed by a Loan Party in
connection with this Agreement. 
 “Loan Party” means the Borrower or any Guarantor. 

“Loans” has the meaning assigned to such term in Section 2.01(b). 

  
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 “Material Adverse Change” means a material adverse change in, or material
adverse effect on, (a) the ability of any Loan Party or any Subsidiary to perform any of its payment or other material obligations under any DIP Order or Loan Document, (b) the validity or enforceability of any Loan Document or
(c) the rights and remedies of or benefits available to the Lender under any DIP Order or Loan Document. For the avoidance of doubt, none of the filing and continuance of the Chapter 11 Cases, the consummation of the Seahawk Asset Sale, the
winding down and concluding of business and activities of any Loan Party or any Subsidiary or any matter arising from or related to any disclosures publicly made by Hercules or any Loan Party on or prior to the Closing Date shall constitute a
“Material Adverse Change”. 
 “Maturity Date” has the meaning set forth in Section 3.01(a).

 “Maximum Amount” has the meaning assigned to such term in Section 2.01. 

“Maximum Liability” has the meaning assigned to such term in Section 11.07. 

“Monthly Wind Down Budget Report” has the meaning assigned to such term in Section 8.01(a). 

“Non-Filing Subsidiary” means any subsidiary of the Borrower that (a) is organized under the laws of the United
States of America or any state thereof or the District of Columbia, and (b) is not a debtor in any Chapter 11 Case. 

“Obligated Party” has the meaning assigned to such term in Section 11.02. 

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement and any other Loan Document. 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity. 
 “Petition Date” means February 11, 2011.

 “Pledged Collateral” has the meaning assigned to such term in Section 4.02. 

“Professional Person” shall mean (a) a Person who is an attorney, accountant, appraiser, auctioneer, investment
banker, restructuring adviser or other professional person and who is retained, with Bankruptcy Court approval, by the Borrower or one of its Subsidiaries pursuant to Section 327 of the Bankruptcy Code, (b) a creditors’ committee
pursuant to Section 1103(a) of the Bankruptcy Code or (c) a committee of equity security holders pursuant to Section 1103(a) of the Bankruptcy Code. 
 “Released Hercules Stock” has the meaning assigned to such term in Section 4.02. 
 “Remaining Pledged Collateral” means all Pledged Collateral (other than Hercules Common Stock) and all Released Hercules Stock. 

  
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 “Reorganization Plan” means a confirmed plan of reorganization or
liquidation in the Chapter 11 Cases, which, in part, provides for the full payment of the outstanding principal amount of the Loans (including all capitalized interest), all accrued and uncapitalized interest thereon and all unpaid or unreimbursed
fees and expenses then owing to the Lender. 
 “Responsible Officer” means, as to any Person, the president,
chief financial officer, principal accounting officer, treasurer or controller of such Person. Unless otherwise specified, all references to a Responsible Officer herein shall mean a Responsible Officer of the Borrower. 

“Seahawk Asset Sale” has the meaning assigned to such term in Section 6.01(f). 

“Subject Bank Account” means the Borrower’s deposit account number 30327498 maintained at Encore Bank. 

“Subject Hercules Common Stock” has the meaning assigned to such term in Section 3.01(b). 

“Subject Property” means the funds on deposit in the Subject Bank Account not in excess of $11,000,000, which funds are
earmarked to be used by the Borrower only to pay (i)(A) certain professional fees and expenses of the official unsecured creditors’ committee and the official equity committee appointed in the Chapter 11 Cases and (B) the professional
fees, success fees and expenses of legal and financial advisors of the Borrower and the Guarantors, in each case, incurred through (but not after) the date on which Seahawk Asset Sale shall have occurred, (ii) final payroll and benefits
obligations (including medical benefits) to rig/operational and corporate personnel for work they performed for the Borrower on or prior to the Seahawk Asset Sale, (iii) “change in control” payments and “key employee retention
plan” payments and (iv) other amounts requested by the Borrower and approved by the Lender. 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any other Person the
accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other Person (a) of which
Equity Interests representing more than 50% of the equity or more than 50% of the ordinary voting power (irrespective of whether or not at the time Equity Interests of any other class or classes of such Person shall have or might have voting power
by reason of the happening of any contingency) or, in the case of a partnership, any general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. 
 “Subsidiary”
means any subsidiary of the Borrower. 
 “Taxes” means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental Authority. 
 “Tranche A Loan” has the
meaning assigned to such term in Section 2.01(a). 
 “Tranche A Loan Amount” has the meaning assigned to
such term in Section 2.01(a). 

  
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 “Tranche B Loan” has the meaning assigned to such term in
Section 2.01(b). 
 “Variances” means, with respect to the Wind Down Budget, as of any date, the Borrower
and its Subsidiaries may have made disbursements that, in the aggregate and on a cumulative basis, are up to 20% in excess of the aggregate cumulative amount set forth in the then effective Wind Down Budget for disbursements to be made by the
Borrower and its Subsidiaries through such date. 
 “VWAP” has the meaning assigned to such term in
Section 3.02. 
 “Wind Down Budget” has the meaning assigned to such term in Section 2.04.

 Section 1.03 Terms Generally; Rules of Construction. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” as used
in this Agreement shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other document herein shall 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 in the Loan Documents), (b) any reference herein to any law shall be construed as referring to such law as amended, modified, codified or reenacted, in whole or in
part, and in effect from time to time, (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to the restrictions contained in the Loan Documents), (d) the words
“herein”, “hereof’ and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof (e) with respect to the determination of any
time period, the word “from” means “from and including” and the word “to” means “to and including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement. No provision of this Agreement or any other Loan Document shall be interpreted or construed against any Person solely because such Person or its legal
representative drafted such provision. 
 ARTICLE II 

THE LOANS 

Section 2.01 Generally. Subject to the terms and conditions set forth herein and in the DIP Orders, the Lender will lend up
to $14,250,000 (the “Maximum Amount”) in the form of two term loans as follows: 
 (a) a term loan (the
“Tranche A Loan”) in an initial principal amount equal to (i) $5,750,000, or (ii) such lesser amount approved by the Bankruptcy Court in the Interim Order (such amount, the “Tranche A Loan Amount”) in a
single draw upon satisfaction of the conditions precedent in Section 6.01; and 
 (b) a term loan (the “Tranche B
Loan” and together with the Tranche A Loan, collectively, the “Loans”) in an initial principal amount equal to the difference between the Maximum Amount and the Tranche A Loan Amount in a single draw upon satisfaction of
the conditions precedent in Section 6.02; 

  
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 provided, however, that the aggregate initial principal amounts of the Tranche A Loan and the Tranche
B Loan shall not exceed the Maximum Amount. 
 Section 2.02 Evidence of Indebtedness. 

(a) Loan Accounts of Lender. The Lender shall maintain in accordance with its usual practice an account evidencing the
Indebtedness of the Borrower to the Lender resulting from the Loans made by the Lender, including the amounts of principal and interest payable and paid to the Lender from time to time hereunder. 

(b) Loan Account. The Lender shall maintain a record of the outstanding principal amount of the Loans, the interest accrued
thereon and all other details relating to payment of the Loans, which record shall be prima facie evidence of the existence and amounts of the Indebtedness recorded therein; provided, that the failure of the Lender to maintain such a
record or any error (other than manifest error) therein shall not in any manner affect the obligation of the Borrower to repay or prepay the Loans or the other Indebtedness in accordance with the terms of this Agreement. 

Section 2.03 Funding of Loans. The Lender will make the Loans available to the Borrower by promptly crediting the amounts, in
dollars in immediately available funds, to an account of the Borrower designated by the Borrower and acceptable to the Lender. 

Section 2.04 Use of Proceeds. Proceeds of the Loans may only be used for (i)(A) the orderly wind down of the Borrower’s
bankruptcy estate, including all costs, fees, expenses (including, without limitation, legal fees and expenses) payable to the Lender and (B) the administration of claims and distributions to creditors and interest holders in accordance with a
budget acceptable to the Lender (together with any and all updates, supplements and/or modifications to such budget that have been approved in advance by the Bankruptcy Court and the Lender, collectively, the “Wind Down Budget”) and
(ii) the Carve-Out. The initial Wind Down Budget is attached hereto as Exhibit A. 
 ARTICLE III 

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES 
 Section 3.01 Repayment. 
 (a) The Loans shall mature upon the earlier
of (i) January 31, 2012 and (ii) the second Business Day after the effective date of the Reorganization Plan (the “Maturity Date”), and the Borrower hereby unconditionally promises to pay to the Lender the then unpaid
the outstanding principal amount of the Loans (including all capitalized interest), all accrued and uncapitalized interest thereon and all unpaid or unreimbursed fees and expenses of the Lender (such aggregate amount, the “Balance
Due”) on the Maturity Date as herein provided. 
 (b) At such time as the Loans shall become due and payable, whether
on the Maturity Date or, if earlier, upon acceleration of the maturity of the Loans pursuant to Section 

  
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10.02, the Balance Due shall be payable by the transfer to the Lender, free and clear of all Liens, of a number of shares of common stock, par value $0.01 per share, of Hercules
(“Hercules Common Stock”) then owned by the Loan Parties and maintained pursuant to the Escrow Agreement as in effect on the date hereof (the “Subject Hercules Common Stock”) having an aggregate value, when
determined in accordance with the provisions of Section 3.02, equal to the Balance Due. 
 (c) If the Borrower is unable to
pay or satisfy in full the Balance Due pursuant to Section 3.01(b) because either (i) the Subject Hercules Common Stock does not constitute Released Hercules Stock or, (ii) after applying all Released Hercules Stock in accordance with
Section 3.01(b) and Section 3.02, a Balance Due remains, such Balance Due shall be payable in full in dollars when due. 
 Section 3.02 Calculation of Hercules Common Stock Value. For purposes of Section 3.01 and to the extent Subject Hercules Common Stock is sold, assigned, transferred, otherwise disposed
of, or accepted in full or partial satisfaction of Indebtedness, Guaranteed Indebtedness or any other obligations owing under any of the Loan Documents as permitted under Section 4.04, Section 10.02 or elsewhere herein (each a
“Collateral Disposition”), each share of Hercules Common Stock shall be valued at a price equal to the Applicable Percentage of the volume-weighted adjusted price on the NASDAQ Global Select Market (“VWAP”) for the
15 consecutive trading days immediately preceding the date such shares of Subject Hercules Common Stock are transferred to the Lender as payment under Section 3.01 or are transferred to the Lender in connection with a Collateral Disposition.
The term “Applicable Percentage” means (a) 90%, if (i)the transfer of the Subject Hercules Common Stock to the Lender or in connection with a Collateral Disposition is (A) registered under applicable federal and state
securities laws or (B) not required to be registered under applicable federal and state securities laws as a result of the exemption from registration set forth in 11 U.S.C. § 1145, (ii) such transfer occurs on or
before the Maturity Date and (iii) no Event of Default has occurred and is continuing on the date of such transfer or would result from the making of such transfer; or (b) 80%, if (i) the transfer of the Subject Hercules Common Stock
to the Lender or in connection with a Collateral Disposition is (A) not registered under applicable federal and state securities laws and (B) not exempt under 11 U.S.C. § 1145 from registration under applicable federal
and state securities or (iii) an Event of Default has occurred and is continuing on the date of such transfer (irrespective of whether such transfer occurs on or before the Maturity Date) or would result from the making of such transfer. All
shares of the Subject Hercules Common Stock shall upon transfer or delivery to the Lender be evidenced by duly executed share certificates and shall be accompanied by transfer powers duly executed in blank, which certificates and transfer powers
shall be in form and substance satisfactory to the Lender. 
 Section 3.03 Interest. 

(a) Loans. Except as provided in Section 3.03(b), the Loans shall bear interest at 13% per annum. 

(b) Default Interest. Upon the occurrence and during the continuance of an Event of Default, the outstanding principal balance of
the Loans shall bear interest at 15% per annum. 

  
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 (c) Interest Payment Dates/ PIK Interest. Accrued interest on the Loans shall be
payable in arrears on the last day of each calendar month and on the Maturity Date and, if not paid in cash, then to the extent not so paid, shall be payable in kind by adding such accrued interest not paid in cash to the unpaid principal balance of
the Loans. All such capitalized interest so added shall be treated as principal of the Loans. 
 (d) Interest Rate
Computations. All interest hereunder shall be computed on the basis of a year of 365 or 366 days, as the case may be. 

Section 3.04 Prepayments. 
 (a) Optional Prepayments. Upon one Business Days’ prior written notice from the Borrower to the Lender, the Borrower may prepay in cash all or any portion of the Loans prior to the Maturity
Date. 
 (b) Mandatory Prepayments. Upon the receipt by any Loan Party of cash proceeds from any of the following events
(net of reasonable fees and out-of-pocket expenses paid to third parties other than an Affiliate of a Loan Party in connection with such event determined reasonably and in good faith by a financial officer of the Borrower, but subject to the
reasonable approval of the Lender): any asset sales, Casualty Events, condemnation proceedings, litigation or other legal recovery or settlement, which cash proceeds exceed $250,000 individually or in the aggregate for all such asset sales, Casualty
Events, condemnation proceedings, litigation and other legal recoveries and settlements that have occurred after the Closing Date (such excess amount, the “Excess Amount”), the Borrower shall make a mandatory prepayment of the Loans
within three days after receiving such cash proceeds in an amount equal to 100% of the Excess Amount. 
 (c) Prepayment
Premium. All prepayments of the Loans made at any time, whether voluntary or mandatory, shall be accompanied by a prepayment premium payable in cash in the amount of 5% of the principal amount of the Loans prepaid at such time. 

Section 3.05 Payments by the Borrower. The Borrower shall make each cash payment required to be made by it hereunder (whether
of principal, interest, or fees, or otherwise) prior to 12:00 noon, Houston time, on the date when due, in immediately available funds, without defense, deduction, recoupment, set-off or counterclaim. All interest capitalized hereunder shall be
deemed timely paid upon it being capitalized pursuant to Section 3.03(c). Any amounts received after such time on any date may, in the discretion of the Lender, be deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such cash payments shall be made to a bank account designated by the Lender. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All cash payments hereunder shall be in dollars. 

Section 3.06 Application of Insufficient Payments. If at any time funds are received by and available to the Lender for
payment on the Indebtedness are insufficient to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder and (ii) second,
towards payment of principal then due hereunder. 

  
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 ARTICLE IV 
 COLLATERAL SECURITY AND ADMINISTRATIVE PRIORITY 
 Section 4.01
Collateral; Security Interest. 
 (a) Pursuant to and as provided in the DIP Orders, as security for the full and timely
payment of all of the Indebtedness or Guaranteed Indebtedness, as applicable, each Loan Party collaterally assigns, pledges and transfers and grants to the Lender a security interest in and to and Lien on all of its right, title and interest in, to
and under all the Collateral, whether now owned or hereafter acquired, now existing or hereafter created and wherever located. 

(b) Pursuant to and as provided in the DIP Orders, the provisions of Section 4.01(a) and the DIP Orders are effective to create in
favor of the Lender legal, valid, perfected and enforceable first priority Lien on and security interest in all right, title and interest in the Collateral, enforceable against each Loan Party that owns an interest in such Collateral and any other
Person and without the necessity of the execution of mortgages, security agreements, pledge agreements, financing statements or other agreements. 
 (c) Pursuant to and as provided in the DIP Orders, the Loans, all Indebtedness and all Guaranteed Indebtedness shall at all times: 

(i) Super-priority: pursuant to section 364(c)(1) of the Bankruptcy Code, constitute allowed superpriority administrative expense
claims in the Chapter 11 Cases, having priority over all administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code and any and all expenses and claims of the Borrower and the Guarantors, whether heretofore or
hereafter incurred, including, but not limited to, the kind specified in sections 105, 326, 328, 506(c), 507(a) or 1114 of the Bankruptcy Code, subject only to the Carve-Out; 
 (ii) Unencumbered property: pursuant to section 364(c)(2) of the Bankruptcy Code, be secured by valid, perfected, first-priority security interests in and liens on all of the Collateral that is not
subject to non-avoidable, valid and perfected liens in existence as of the date on which the Interim Order is entered by the Bankruptcy Court, subject only to the Carve-Out; and 

(iii) Priming liens: pursuant to section 364(d)(1) of the Bankruptcy Code, be secured by valid priming perfected security
interests in and liens on all property, senior in all respects to the security interests and Liens securing any Loan Party’s obligations (other than the Indebtedness and the Guaranteed Indebtedness), subject only to the Carve-Out. 

(d) All Liens on the Collateral in favor of the Lender shall be senior in priority to any security interests in or Liens on the
Collateral, except as otherwise permitted above. There shall be no liens or encumbrances on Collateral that secure indebtedness of any of the Loan Parties or their respective subsidiaries. 

  
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 (e) Pursuant to and as provided in the DIP Orders, (i) the Liens and security interests
granted herein shall be deemed valid, enforceable and perfected by entry of the Interim Order and the Final Order, as applicable, and (ii) no financing statement, notice of Lien, mortgage, deed of trust or similar instrument in any jurisdiction
or filing office need be filed or any other action taken in order to validate and perfect the Liens and security interests granted by or pursuant to this Agreement or the DIP Orders. 

Section 4.02 Pledged Collateral. Upon request of the Lender, each Loan Party will (a) deliver to the Lender, all
certificates, promissory notes or Instruments representing or evidencing any Subject Hercules Common Stock, Equity Interests in Subsidiaries or loans made by any of the Loan Parties to non-Loan Parties (collectively, the “Pledged
Collateral”), whether now arising or hereafter acquired, in suitable form for transfer by delivery or, as applicable, accompanied by such Loan Party’s endorsement, where necessary, or duly executed instruments of transfer or assignment
in blank, all in form and substance satisfactory to the Lender or (b) register Pledged Collateral in the name of the Lender; provided, however, that no Loan Party will be required to deliver any certificates or Instruments representing
or evidencing or register in the name of the Lender any Hercules Common Stock or Subject Hercules Common Stock until (i) the Reorganization Plan has been confirmed, (ii) such stock has been released from the Escrow Agreement and
(iii) such Loan Party is otherwise so authorized by the Bankruptcy Court (any Hercules Common Stock satisfying each of the conditions in this proviso, the “Released Hercules Stock”). 

Section 4.03 [Intentionally Left Blank] 
 Section 4.04 Remedies, Rights Upon Default. 
 (a) If any Event of
Default shall occur and be continuing, the Lender may exercise in addition to all other rights and remedies granted to it in this Agreement, any other Loan Document and the DIP Orders, all rights and remedies of a secured party under the UCC;
provided, however, that the exercise by the Lender of any right or remedy to sell, transfer or otherwise dispose of or require registration of Hercules Common Stock shall only be exercised with respect to Released Hercules Stock. Without
limiting the generality of the foregoing, each Loan Party expressly agrees that in any such event the Lender, without demand of performance or other demand, advertisement or notice of any kind (except demand, advertisement, notice or any other
condition or obligation required by the Interim Order or Final Order or the notice specified below of time and place of public or private sale) to or upon such Loan Party or any other Person (all and each of which demands, advertisements and/or
notices are hereby expressly waived to the maximum extent permitted by the UCC and other applicable law), may forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give an option or options to purchase, or sell or otherwise dispose of and deliver said Collateral (or contract to do so), or any part thereof, in one or more parcels at public or private sale or sales, at any exchange or broker’s board or at
any of the Lender’s offices or elsewhere at such prices at it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Lender shall have the right upon any such public sale or sales to purchase the
whole or any part of said Collateral so sold, free of any right or equity of redemption, which equity of redemption each Loan Party hereby releases. Each Loan Party further agrees, at the Lender’s request, to assemble the Collateral and make it
available to the 

  
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Lender at places which the Lender shall reasonably select, whether at such Loan Party’s premises or elsewhere. The Lender shall apply the proceeds of any such collection, recovery, receipt,
appropriation, realization or sale (net of all expenses incurred by the Lender in connection therewith, including, without limitation, attorney’s fees and expenses), to the Indebtedness in any order deemed appropriate by the Lender, the Loan
Parties remaining liable for any deficiency remaining unpaid after such application, and only after so paying over such net proceeds and after the payment by the Lender of any other amount required by any provision of law, including, without
limitation, the UCC, need the Lender account for the surplus, if any, to the Loan Parties. To the maximum extent permitted by applicable law, each Loan Party waives all claims, damages, and demands against the Lender and the Lender arising out of
the repossession, retention or sale of the Collateral except such as arise out of the gross negligence or willful misconduct of the Lender. Each Loan Party agrees that the Lender need not give more than 10 days’ notice to such Loan Party (which
notification shall be deemed given when mailed or delivered on an overnight basis, postage prepaid, addressed to such Loan Party at its address referred to in Section 12.01) of the time and place of any public sale of Collateral or of the time
after which a private sale may take place and that such notice is reasonable notification of such matters. The Lender and its agents shall have the right without breach of the peace to enter upon any real property owned or leased by any Loan Party
to exercise any of its rights or remedies under this Agreement, subject to the rights of other Persons in lawful possession thereof. The Lender shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The
Lender may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and any such sale may, without further notice, be made at the time and place to which it was adjourned. Each Loan Party shall
remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay its Indebtedness and all other amounts to which the Lender are entitled, such Loan Party also being liable for the fees and
expenses of any attorneys employed by the Lender to collect such deficiency. 
 (b) Each Loan Party hereby waives presentment,
demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Agreement or any Collateral. 
 (c) Pledged Collateral. 
 (i) During the continuance of an Event of
Default, if the Lender shall give notice of its intent to exercise such rights to the Loan Parties, (i) the Lender shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Released Hercules
Stock and the Remaining Pledged Collateral and make application thereof to the Indebtedness, and (ii) the Lender or its nominee may exercise, to the extent exercisable by the applicable Loan Party, (A) all voting, consent, corporate and
other rights pertaining to the Released Hercules Stock and the Remaining Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and
(B) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to the Released Hercules Stock and the Remaining Pledged Collateral as if it were the absolute owner thereof (including the
right to exchange at its discretion any and all of the Pledged Collateral upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any issuer of Released

  
 17 

 
Hercules Stock and the Remaining Pledged Collateral, the right to deposit and deliver any and all of the Released Hercules Stock and the Remaining Pledged Collateral with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Lender may determine), all without liability except to account for property actually received by it, but the Lender shall have no duty to any Loan
Party to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 
 (ii) In order to permit the Lender to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may
be entitled to receive hereunder, after the occurrence and during the continuance of an Event of Default, (A) each Loan Party, as applicable, shall promptly execute and deliver (or cause to be executed and delivered) to the Lender all such
proxies, dividend payment orders and other instruments as the Lender may from time to time reasonably request and (B) without limiting the effect of clause (A) above, each Loan Party hereby grants to the Lender an irrevocable proxy to vote
all or any part of the Released Hercules Stock and the Remaining Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the
necessity of any such action (including any transfer of any such Released Hercules Stock and the Remaining Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any
officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon the payment in full of the Indebtedness. 
 (iii) Each Loan Party hereby expressly authorizes and instructs each issuer of any Pledged Collateral pledged hereunder by such Loan Party to (A) comply with any instruction received by it from the
Lender in writing in respect to the Released Hercules Stock and the Remaining Pledged Collateral that (1) during the pendency of an Event of Default, states that an Event of Default has occurred and is continuing and (2) is otherwise in
accordance with the terms of this Agreement, without any other or further instructions from such Loan Party, and such Loan Party agrees that such issuer shall be fully protected in so complying and (B) as expressly permitted herein, pay any
dividends or other payments with respect to such Released Hercules Stock and Remaining Pledged Collateral directly to the Lender. 
 Section 4.05 Appointment as Attorney-in-Fact. 
 (a) Each Loan Party
hereby irrevocably constitutes and appoints the Lender and any officer or agent thereof, with full power of substitution, as its and its Subsidiaries’ true and lawful attorney-in-fact with full irrevocable power and authority in the place and
stead of such Loan Party and in the name of such Loan Party, or in its own name, from time to time in the Lender’s discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute
and deliver any and all documents and instruments which may be necessary and desirable to accomplish the purposes of this Agreement and the transactions contemplated hereby, and, without limiting the generality of the foregoing, hereby give the
Lender the power and right, on behalf of such Loan Party, without notice to or assent by such Loan Party to do the following: 

(i) to ask, demand, collect, receive and give acquittances and receipts for any and all moneys due and to become due under any
Collateral (other than any Hercules Common Stock, unless it then constitutes Released Hercules Stock, or proceeds thereof) and, in the name of such Loan Party, its own name or otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other Instruments for the payment of moneys due under any such Collateral and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Lender for
the purpose of collecting any and all such moneys due under any such Collateral whenever payable and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Lender for the
purpose of collecting any and all such moneys due under any such Collateral whenever payable; 

  
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 (ii) to pay or discharge taxes, Liens, security interests or other encumbrances levied or
placed on or threatened against the Collateral, to effect any repairs or any insurance called for by the terms of this Agreement and to pay all or any part of the premiums therefor and the costs thereof; and 

(iii) (A) to direct any party liable for any payment under any of the Collateral (other than any Hercules Common Stock, unless it then
constitutes Released Hercules Stock, or proceeds thereof) to make payment of any and all moneys due, and to become due thereunder, directly to the Lender or as the Lender shall direct; (B) to receive payment of and receipt for any and all
moneys, claims and other amounts due, and to become due at any time, in respect of or arising out of any such Collateral; (C) to sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications and notices in connection with accounts and other documents constituting or relating to such Collateral; (D) to commence and prosecute any suits, actions or proceedings at law or equity in any court
of competent jurisdiction to collect such Collateral or any part thereof and to enforce any other right in respect of any such Collateral; (E) to defend any suit, action or proceeding brought against such Loan Party with respect to any such
Collateral of such Loan Party; (F) to settle, compromise or adjust any suit, action or proceeding described above and, in connection therewith, to give such discharges or releases as the Lender may deem appropriate; (G) to license or, to
the extent permitted by an applicable license, sublicense, whether general, special or otherwise, and whether on an exclusive or non exclusive basis, any trademarks, throughout the world for such term or terms, on such conditions, and in such
manner, as the Lender shall in their sole discretion determine; and (H) generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of such Collateral as fully and completely as though the Lender were the
absolute owner thereof for all purposes, and to do, at the Lender’s option and the Borrower’s expense, at any time, or from time to time, all acts and things which the Lender reasonably deem necessary to protect, preserve or realize upon
such Collateral and the Lender’s Lien therein, in order to effect the intent of this Agreement, all as fully and effectively as such Loan Party might do. 
 (b) The Lender agrees that it will forbear from exercising the power of attorney or any rights granted to the Lender pursuant to this Section, except upon the occurrence

  
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or during the continuation of an Event of Default. Each Loan Party hereby ratifies, to the extent permitted by law, all that said attorneys shall lawfully do or cause to be done by virtue hereof.
Exercise by the Lender of the powers granted hereunder is not a violation of the automatic stay provided by Section 362 of the Bankruptcy Code and each Loan Party waives applicability thereof. The power of attorney granted pursuant to this
Section is a power coupled with an interest and shall be irrevocable until the Indebtedness is indefeasibly paid in full. 
 (c)
The powers conferred on the Lender hereunder are solely to protect the Lender’s and the Lender’ interests in the Collateral and shall not impose any duty upon them to exercise any such powers. The Lender shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers and neither it nor any of its officers, directors, employees or agents shall be responsible to any of the Loan Parties for any act or failure to act, except for their own
gross negligence or willful misconduct. 
 (d) Each Loan Party also authorizes the Lender, at any time and from time to time
upon the occurrence and during the continuation of any Event of Default or as otherwise expressly permitted by this Agreement, (i) to communicate in its own name or the name of its Subsidiaries with any party to any contract with regard to the
assignment of the right, title and interest of the Loan Parties in and under the contracts hereunder and other matters relating thereto and (ii) to execute any endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral (other than any Hercules Common Stock, unless it then constitutes Released Hercules Stock, or proceeds thereof). 
 ARTICLE V 
 TAXES 

Section 5.01 Taxes. 
 (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if any Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section 5.02(a)), the Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party shall
make such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. 
 (b) Payment of Other Taxes by each Loan Party. Each Loan Party shall pay its Other Taxes to the relevant Governmental Authority in accordance with applicable law. 

(c) Indemnification by the Loan Parties. Each Loan Party shall indemnify the Lender, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the Lender on or with respect to any payment by or on account of any obligation of such Loan Party hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such 

  
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Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate of the Lender as to the amount of such payment or liability
under this Section shall be delivered to the Loan Parties and shall be conclusive absent manifest error. 
 (d) Evidence of
Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority, the Borrower shall deliver to the Lender the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Lender. 
 (e) Exceptions. Notwithstanding anything herein to the contrary, the Lender shall not be indemnified for any Indemnified Taxes or Other Taxes pursuant to Section 5.02(c) unless the Lender
shall make written demand on the Loan Parties for such reimbursement no later than six (6) months after the earlier of (A) the date on which the relevant taxing authority makes written demand upon such Person for such Indemnified Taxes or
Other Taxes, or (B) the date on which such Person has made payment of such Indemnified Taxes or Other Taxes; provided that if the Indemnified Taxes or Other Taxes imposed or giving rise to such claims are retroactive, then the six-month
period referred to in Section 5.01(c) shall be extended to include the period of retroactive effect thereof. 

Section 5.02 Mitigation Indebtedness. If the Loan Parties are required to pay any additional amount to the Lender or any
Governmental Authority for the account of the Lender pursuant to Section 5.01, then the Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of the Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 5.01 in the future and
(ii) would not subject the Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to the Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by the Lender in connection with any
such designation or assignment. 
 ARTICLE VI 
 CONDITIONS PRECEDENT 
 Section 6.01 Conditions Precedent to
Effectiveness of Agreement and Tranche A Loan. This Agreement and the obligation of the Lender to make the Tranche A Loan hereunder shall not become effective until the date on which each of the following conditions is satisfied: 

(a) The Lender shall have received from each party hereto counterparts of this Agreement signed on behalf of such party. 

(b) The Lender shall have received a copy of the Wind Down Budget. 

(c) The Bankruptcy Court shall have entered an interim order, approving on an interim basis, among other things, the transactions
outlined herein and granting the priority liens and administrative expense claims referred to above, which order shall be in form and substance acceptable to the Lender (the “Interim Order”) and shall not have been stayed, reversed,
vacated or otherwise modified or amended. 

  
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 (d) There shall have occurred no event or circumstance that has resulted in a Material
Adverse Change. 
 (e) All principal, interest, fees and other amounts owing under the DE Shaw DIP Facility shall have been
repaid in full and all liens and security interests related thereto shall have been terminated or released, in each case, on terms satisfactory to the Lender. 
 (f) The closing of the sale of all or substantially all of the assets of the Borrower and its subsidiaries as contemplated pursuant to the asset purchase agreement dated February 11, 2011 (the
“APA”) by and among the Borrower, Seahawk Global Holdings LLC, Seahawk Mexico Holdings LLC, Seahawk Drilling Management LLC, Seahawk Offshore Management LLC, Energy Supply International LLC, and Seahawk Drilling LLC, as sellers, and
SD Drilling LLC and Hercules Offshore, Inc. (“Hercules”), as purchasers (such sale, the “Seahawk Asset Sale”) shall have occurred in accordance with the terms of the APA. 

(g) All of the representations and warranties set forth herein or in the Interim Order shall be true and correct in all material
respects. 
 (h) The absence of an Event of Default or any event or condition that with notice or the passage of time would
become an Event of Default. 
 (i) Other than the Chapter 11 Cases, there shall exist no action, suit, investigation, litigation
or proceeding pending in any court or before any arbitrator or governmental instrumentality that (i) could reasonably be expected to result in a Material Adverse Change or, if adversely determined, could reasonably be expected to result in a
Material Adverse Change or (ii) restrains or prevents, or imposes or could reasonably be expected to impose materially adverse conditions upon the Collateral, this Agreement, any of the other Loan Documents or the transactions contemplated
hereby or thereby or threatens to do any of the foregoing. 
 (j) The Lender shall have received such other documents as the
Lender may reasonably request. 
 Section 6.02 Conditions Precedent to the Tranche B Loan. The obligation of the
Lender to make the Tranche B Loan hereunder shall not become effective until the date on which each of the following conditions is satisfied: 
 (a) All of the conditions set forth in Section 6.01 shall have been satisfied. 
 (b) The Bankruptcy Court shall have entered the Final Order, which shall not have been stayed, reversed, vacated or otherwise modified or amended. 

(c) All of the representations and warranties set forth in the Loan Documents and in the DIP Orders shall be true and correct in all
material respects. 

  
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 (d) The absence of an Event of Default or any event or condition that with notice or the
passage of time would become an Event of Default. 
 ARTICLE VII 

REPRESENTATIONS AND WARRANTIES 
 Each Loan Party represents and warrants to the Lender that: 
 Section 7.01
Organization; Powers. Each Loan Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite corporate or limited liability company (as the case may be) power and
authority, and has all material governmental licenses, authorizations, consents and approvals necessary, to own its assets and to carry on its business as now conducted, and is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required, except where failure to have such power, authority, licenses, authorizations, consents, approvals and qualifications could not reasonably be expected to result in a Material Adverse Change.

 Section 7.02 Authority; Enforceability. The execution, delivery and performance by each Loan Party of each of the
Loan Documents to which it is a party are within its corporate or limited liability company (as the case may be) powers and have been duly authorized by all necessary corporate, limited liability company and, if required, stockholder, member or
manager action (including, without limitation, any action required to be taken by any class of directors of the Borrower or any other Person, whether interested or disinterested, in order to ensure the due authorization of such transactions). Each
Loan Document to which the Borrower and each Guarantor is a party has been duly executed and delivered by the Borrower and such Guarantor and constitutes a legal, valid and binding obligation of the Borrower and such Guarantor, as applicable,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law. 
 Section 7.03 Approvals; No Conflicts. The execution, delivery and
performance by each Loan Party of each of the Loan Documents to which it is a party (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority to be obtained or made by any
Loan Party pursuant to any statute, rule or regulation applicable to it or any other third Person (including shareholders or any class of directors, whether interested or disinterested, of the Borrower or any other Person), nor is any such consent,
approval, registration, filing or other action necessary for the validity or enforceability of any Loan Document or the consummation of the transactions contemplated thereby, except such as have been obtained or made and are in full force and effect
other than (i) approvals of the Bankruptcy Court, and (ii) those third party approvals or consents which, if not made or obtained, would not cause a Default hereunder, could not reasonably be expected to result in a Material Adverse Change
or do not have an adverse effect on the enforceability of the Loan Documents, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of any Loan Party or any order of any Governmental
Authority which is binding upon any Loan Party or its Properties, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or its properties, or

  
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give rise to a right thereunder to require any payment to be made by the Borrower or such Subsidiary and (d) will not result in the creation or imposition of any Lien on any property of the
any Loan Party (other than the Liens created by the Loan Documents and the DIP Orders). 
 Section 7.04 Litigation.
Other than as set forth in the schedules, statements and other filings of the Loan Parties made with the Bankruptcy Court (collectively, the “Bankruptcy Court Schedules”), there are no actions, suits, investigations or proceedings
by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any Subsidiary (i) as to which there is a reasonable possibility of an adverse
determination that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change, or (ii) that involve any Loan Document. 

Section 7.05 Compliance with the Laws and Agreements; No Defaults. 

(a) Each of the Borrower and each Subsidiary is in compliance with all Governmental Requirements applicable to it or its property and all
agreements and other instruments binding upon it or its property, and possesses all licenses, permits, franchises, exemptions, approvals and other governmental authorizations necessary for the ownership of its property and the conduct of its
business, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change. 
 (b) No Default has occurred and is continuing. 
 Section 7.06 Investment
Company Act. Neither the Borrower nor any Subsidiary is an “investment company” or a company “controlled” by an “investment company,” within the meaning of, or subject to regulation under, the Investment Company Act
of 1940, as amended. 
 Section 7.07 Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to
be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the
Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Change. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of Taxes and other governmental charges are, in the reasonable opinion of the Borrower, adequate. No tax lien has been filed against the Borrower or any
Subsidiary in any public records, such as Uniform Commercial Code records and real property records. 
 Section 7.08
Disclosure; No Material Misstatements. The Borrower has provided to the Lender all information reasonably requested of it for timely delivery prior to the Closing Date. None of the reports, financial statements, certificates or other
information (including the Schedules listing the property and debts of the Borrower and its Subsidiaries that have been filed with the Bankruptcy Court in the Chapter 11 Cases) furnished by or on behalf of the Borrower or any Subsidiary to the
Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or under any other Loan Document (as modified or supplemented by other information so furnished) contains any material misstatement of fact
or 

  
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omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to
projected financial information, if any, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time 

Section 7.09 Subsidiaries. The cash and the fair market value of the other properties owned or held by the Foreign
Subsidiaries and the Non-Filing Subsidiaries as of the Closing Date do not exceed, in the aggregate, $1,000,000. 

Section 7.10 Material Agreements; Bank Accounts. 
 (a) All material leases, licenses and agreements necessary for the conduct of the orderly wind down of the bankruptcy estates of the Loan Parties are valid and subsisting, in full force and effect, and
there exists no default or event or circumstance which with the giving of notice or the passage of time or both would give rise to a default under any such lease or leases, which could reasonably be expected to have a Material Adverse Change.

 (b) The Bankruptcy Court Schedules contain the account numbers and locations of all deposit accounts (other than the Subject
Bank Account) and securities accounts of the Loan Parties. 
 Section 7.11 Use of Loan Proceeds. The Borrower and
its Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of
Regulation T, U or X of the Board). No part of the proceeds of the Loans will be used for any purpose which violates the provisions of Regulations T, U or X of the Board. 

ARTICLE VIII 
 AFFIRMATIVE COVENANTS 
 Until the principal of and interest on the Loans
and all fees payable hereunder and all other amounts payable under the Loan Documents shall have been paid in full, each Loan Party covenants and agrees with the Lender that: 
 Section 8.01 Wind Down Budget and Other Reports. The Borrower will furnish to the Lender: 
 (a) Wind Down Budget. Within 10 days after the end of each calendar month, beginning with the report for the month of May, a report in form of Exhibit C (the “Monthly Wind Down Budget
Report”) (i) to the Lender setting forth actual cash receipts and disbursements for the preceding calendar month on a monthly and cumulative basis, and (ii) at the option of the Borrower, an update to the Wind Down Budget in form
and substance acceptable to the Lender setting forth, among other things, any changes in the Wind Down Budget reasonably anticipated by Borrower and its Subsidiaries (it being understood that no such changes shall become part of the Wind Down Budget
unless approved by the Lender in writing). After each such delivery, the Borrower shall provide such additional information, if any, as the Lender shall reasonably request. Compliance with the Wind Down Budget and the Variances shall be tested on a
monthly basis. 

  
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 (b) Reports Filed with U.S. Trustee. Within two Business Days after any request by
the Lender therefor, a copy of each report filed by the Borrower or any Subsidiary with the office of the United States Trustee which is not publicly available. 
 (c) Copies of Pleadings, etc. Within two Business Days after any request by the Lender therefor, copies of all pleadings, motions, reports, applications and other papers filed by the Borrower or
any Subsidiary with the Bankruptcy Court which are not publicly available, as well as copies of any such billing and expense statements received from any Professional Person. 
 (d) Other Requested Information. Promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Agreement or any other Loan Document, as the Lender may reasonably request. 

Section 8.02 Notices of Material Events. The Borrower will furnish to the Lender written notice within three Business Days
after its knowledge of any of the following: 
 (a) the occurrence of any Event of Default; 

(b) any pleading filed with the Bankruptcy Court seeking relief from stay or conversion or dismissal of any Chapter 11 Case (together
with a copy of such pleading); 
 (c) any proposed sale of any of the Collateral (including with such notice copies of drafts of
all instruments and agreements applicable to any such sale), which shall specify the identity of the proposed purchaser, the terms of the proposed sale and the expected date of closing, subject to Bankruptcy Court approval; and 

(d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Change. 

Section 8.03 Existence; Conduct of Business. Each Loan Party will, and will cause each of its Subsidiaries to, do or cause to
be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business and maintain, if necessary, its qualification
to do business in each other jurisdiction in which the ownership of its properties requires such qualification, except where the failure to so qualify could not reasonably be expected to have a Material Adverse Change. 

Section 8.04 Books and Records; Inspection Rights. Each Loan Party will, and will cause each of its Subsidiaries to, keep
proper books of record and account according to reasonable practices used by companies that are winding down a bankruptcy estate in which full, true and correct entries are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each Subsidiary to, permit any representatives designated by the Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested. 

  
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 Section 8.05 Compliance with Laws. Each Loan Party will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Change. 
 Section 8.06 Further Assurances. 

(a) Each Loan Party at its sole expense will, and will cause each of its Subsidiaries to, promptly execute and deliver to the Lender all
such other documents, agreements and instruments reasonably requested by the Lender to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the Borrower or any Subsidiary, as the case may be, in the Loan
Documents or to further evidence and more fully describe the collateral intended as security for the Indebtedness, or to correct any omissions in this Agreement or the other Loan Documents, or to state more fully the obligations secured therein, or
to perfect, protect or preserve any Liens under applicable state law that have been created pursuant to this Agreement and/or the DIP Orders (including requiring control agreements with respect to deposit accounts and/or securities accounts of the
Loan Parties) or any of the other Loan Documents or the priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be reasonably necessary or appropriate, in the sole discretion of the Lender, in connection
therewith. 
 (b) Each Loan Party hereby authorizes the Lender to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral including a collateral description of “all assets” or “all property” of each Loan Party. 
 ARTICLE IX 
 NEGATIVE COVENANTS 

Until the principal of and interest on the Loans and all fees payable hereunder and all other amounts payable under the Loan Documents
shall have been paid in full, each Loan Party covenants and agrees with the Lender that: 
 Section 9.01 Debt. No
Loan Party will, nor will it permit any of its Subsidiaries to, incur, create, assume or suffer to exist any Debt, except: 

(a) the Loans or other Indebtedness or any guaranty of or suretyship arrangement for the Loans or other Guaranteed Indebtedness;

 (b) Debt of the Borrower and its Subsidiaries existing on the date hereof that is disclosed in the Bankruptcy Court Schedules
or any claim filed or asserted against the Borrower or any of its Subsidiaries; and 
 (c) endorsements of negotiable
instruments for collection in the ordinary course of business. 

  
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 Section 9.02 Liens. No Loan Party will, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any of its properties (now owned or hereafter acquired), except: 
 (a) Liens securing the payment of any Indebtedness and/or Guaranteed Indebtedness; 

(b) Excepted Liens; 
 (c) the Carve-Out; and 
 (d) Liens of the Borrower and its Subsidiaries existing
on the date hereof that are disclosed in the Bankruptcy Court Schedules. 
 Section 9.03 Prohibited Payments. No
Loan Party will, nor will it permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any expenditure, payment, advance, loan or reimbursement that is not identified in the Wind Down Budget or otherwise
permitted by the Lender. 
 Section 9.04 Foreign Operations. The Borrower will not, and will not permit any
Subsidiary to, have any property outside the jurisdiction of the United States federal courts, except for the property of the Foreign Subsidiaries organized in Mexico. No Loan Party shall make any loans to, investments in or other transfers of
assets to any of the Foreign Subsidiaries. The Foreign Subsidiaries may not maintain more than $850,000 (or the equivalent thereof in foreign currency) in accounts in Mexico. 
 Section 9.05 Proceeds of Loans. 
 (a) Neither the Borrower nor any
Person acting on behalf of the Borrower has taken or will take any action which might cause any of the Loan Documents to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of the Securities Exchange Act
of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect. 
 (b)
None of the proceeds of the Loans or the Collateral shall be used to pay any fees or expenses incurred in connection with the assertion of or joinder in any claim, counterclaim, action, contested matter, objection, defense or other proceeding, the
purpose of which is to seek or the result of which would be to obtain any order, judgment, declaration, or similar relief (i) invalidating, setting aside, avoiding or subordinating, in whole or in part, the Loans or the Liens and security
interests in any of the Collateral granted to the Lender hereunder or under the Loan Documents or the DIP Orders; (ii) declaring the DIP Orders and/or any of the Loan Documents to be invalid, not binding or unenforceable in any respect,
(iii) preventing, enjoining, hindering or otherwise delaying the Lender’s enforcement of any of its rights and remedies under the DIP Orders and/or the Loan Documents or any realization upon any Collateral (unless such enforcement or
realization is in direct violation of an explicit provision in any of the DIP Orders); (iv) declaring any Liens granted or purported to be granted hereunder or under the Loan Documents or the DIP Orders to have a priority other than the
priority set forth herein or therein; or (v) objecting to the amount or method of calculation by the Lender of any of the principal and/or interest owed or owing on the Loans. 

Section 9.06 Mergers, Etc. No Loan Party will, nor will it permit any of its Subsidiaries to, merge into or with or
consolidate with any other Person, or permit any other 

  
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Person to merge into or consolidate with it; provided, however, that the following shall be permitted: (a) the merger of any Subsidiary with or into the Borrower so long as the Borrower is
the surviving Person, (b) the merger of any Guarantor with or into any other Guarantor and (c) any Subsidiary that is not a Loan Party with and into any other Subsidiary that is not a Loan Party. No Loan Party will dissolve or cease to
exist, except as permitted in the foregoing sentence. 
 Section 9.07 Subsidiaries. Neither the Borrower and nor any
of its Subsidiaries shall form or acquire any Domestic Subsidiary or Foreign Subsidiary. 
 Section 9.08 Wind Down
Budget. No Loan Party will, nor will it permit any of its Subsidiaries to, make or commit or agree to make any expenditure in any given calendar month that would exceed the Wind Down Budget as then in effect for such calendar month (but subject
to the Variances). Compliance with the Wind Down Budget and the Variances shall be tested on a monthly basis. 

Section 9.09 Deposit and Securities Accounts. No Loan Party will, nor will it permit any of its Subsidiaries to, open any
deposit account or securities account, unless the Borrower shall have delivered written notice thereof to the Lender three Business Days prior to the opening of any such deposit account or securities account. In no event shall the Subject Bank
Account contain any proceeds of the Loans or other Collateral securing the Loans. 
 Section 9.10 Subject Hercules
Common Stock. Without the Lender’s prior written consent, no Loan Party will, nor will it permit any of its Subsidiaries to, sell, assign, transfer or otherwise dispose of Subject Hercules Common Stock to anyone other than the Lender.

 ARTICLE X 
 EVENTS OF DEFAULT; REMEDIES 
 Section 10.01 Events of Default.
One or more of the following events shall constitute an “Event of Default”: 
 (a) the Borrower shall fail to
pay any principal of the Loans when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof, by acceleration or otherwise; 

(b) the Borrower shall fail to pay any interest on the Loans or any fee or any other amount (other than an amount referred to in
Section 10.01(a)) payable under any Loan Document, when and as the same shall become due and payable; 
 (c) any
representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification of any Loan Document or waiver under such Loan Document, or in any report,
certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or
deemed made; 

  
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 (d) the Borrower or any Subsidiary shall fail to observe or perform any covenant, condition
or agreement contained in Article III, Article IV, Section 8.02, Section 8.04, Section 8.05, Section 8.06 or Article IX; 
 (e) the Borrower or any Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in (i) Section 8.01(a) and such failure shall continue unremedied for a period
of three Business Days after the earlier to occur of (A) notice thereof from the Lender to the Borrower or (B) a Responsible Officer of the Borrower or such Subsidiary otherwise becoming aware of such default, or (ii) this Agreement
(other than those specified in Section 10.01(a), Section 10.01(b), Section 10.01(c), Section 10.01(d) or Section 10.01(e)(i)) or any other Loan Document, and such failure shall continue unremedied for a period of 30 days
after the earlier to occur of (A) notice thereof from the Lender to the Borrower or (B) a Responsible Officer of the Borrower or such Subsidiary otherwise becoming aware of such default; 

(f) (i) the Borrower or any Subsidiary shall fail to comply with any of the provisions of any DIP Order or any Cash Collateral Order;
(ii) a trustee shall be appointed in any Chapter 11 Case prior to the confirmation of a Reorganization Plan (provided, however, that an Event of Default shall not be deemed to have occurred upon the appointment by the
Borrower’s board of directors or the Bankruptcy Court of any other Person appointed to manage the affairs of the Loan Parties); (iii) any Chapter 11 Case shall be dismissed or converted to a case under Chapter 7; (iv) there shall be
filed by any Loan Party any motion to sell all or a substantial part of the Collateral on terms that are not acceptable to the Lender in its sole discretion; (v) without the Lender’s prior written consent, the Borrower or any Subsidiary
shall file any motion to alter, amend, vacate, supplement, modify, or reconsider, in any respect, any DIP Order or, without the Lender’s prior written consent, any DIP Order is amended, vacated, stayed, reversed or otherwise modified;
(vi) the Bankruptcy Court shall enter an order granting to any Person (other than the Lender) relief from the automatic stay to foreclose upon a Lien (or to accept a deed in lieu of foreclosure or the like) with respect to any property of the
Borrower that has an aggregate book value in excess of $50,000 or to terminate or otherwise exercise remedies under any material agreement, document or instrument which is entered into after the Petition Date, whether or not it relates to any Debt;
(vii) the Borrower or any Subsidiary shall file a motion or other request with the Bankruptcy Court seeking authority to use any cash proceeds of the Collateral or to obtain any financing under Section 364(c) or Section 364(d) of the
Bankruptcy Code or otherwise secured by a Lien upon any Collateral (in each case (A) without the Lender prior written consent or (B) if such motion fails to contemplate payment in full of the Indebtedness); (viii) the payment by the
Borrower or any Subsidiary of any pre-petition Debt, other than as approved by the Bankruptcy Court; or (ix) the Borrower or any Subsidiary shall submit any motion or other pleading in any Chapter 11 Case attacking the validity or
enforceability of any DIP Order or any of the Loan Documents; 
 (g) the Loan Documents after delivery thereof shall for any
reason, except to the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding and enforceable in accordance with their terms against the Borrower or a Guarantor party thereto or shall be repudiated by any of
them, or cease to create a valid and perfected Lien of the priority required thereby on any of the collateral purported to be covered thereby, except to the extent permitted by the terms of this Agreement, or the Borrower or any Subsidiary or any
Guarantor shall so state in writing; 

  
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 (h) the allowance of any claim under Section 506(c) of the Bankruptcy Code against the
Lender; 
 (i) subject to the payments permitted by the Wind Down Budget, the payment by a Loan Party of, or application by any
Loan Party for authority to pay, any claim without the consent of the Lender; or 
 (j) the Bankruptcy Court shall not have
entered a final order, in form and substance acceptable to the Lender, on or before May 10, 2011, approving, among other things, the transactions outlined herein and granting the priority liens and administrative expense claims referred to
herein (the “Final Order”), which shall not have been stayed, reversed, vacated or otherwise modified or amended. 
 Section 10.02 Remedies. 
 (a) In the case of an Event of Default, at
any time thereafter during the continuance of such Event of Default, the Lender may by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate any further commitment to lend to the
Borrower and (ii) declare the outstanding principal amount of the Loans to be due and payable, and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations
of the Borrower and the Guarantors accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any
kind, all of which are hereby waived by the Borrower and each Guarantor. 
 (b) In the case of the occurrence of an Event of
Default, the Lender will have all other rights and remedies available at law and equity. 
 ARTICLE XI 

GUARANTY 

Section 11.01 Guaranty. Each Guarantor hereby agrees that it is jointly and severally liable for, and, as primary obligor and
not merely as surety, absolutely and unconditionally guarantees to the Lender the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Indebtedness and all costs and expenses
including, without limitation, all court costs and attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Lender in endeavoring to collect all or any part of the
Indebtedness from, or in prosecuting any action against, the Borrower, any Guarantor or any other guarantor of all or any part of the Indebtedness (such costs and expenses, together with the Indebtedness, collectively the “Guaranteed
Indebtedness”). Each Guarantor further agrees that the Guaranteed Indebtedness may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such
extension or renewal. 

  
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 Section 11.02 Guaranty of Payment. This is a guaranty of payment and not of
collection. Each Guarantor waives any right to require the Lender to sue the Borrower, any Guarantor, any other guarantor, or any other person obligated for all or any part of the Guaranteed Indebtedness (each, an “Obligated
Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Indebtedness. 
 Section 11.03 No Discharge or Diminishment of Guaranty. 
 (a) Except
as otherwise provided for herein, the obligations of each Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash
of the Guaranteed Indebtedness), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Indebtedness, by operation of law or otherwise; (ii) any change in
the corporate existence, structure or ownership of the Borrower or any other guarantor of or other person liable for any of the Guaranteed Indebtedness; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any
Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Guarantor may have at any time against any Obligated Party,
Lender, or any other person, whether in connection herewith or in any unrelated transactions. 
 (b) The obligations of each
Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Indebtedness or otherwise, or any provision of
applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Indebtedness or any part thereof. 
 (c) Further, the obligations of any Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Lender to assert any claim or demand or to enforce any remedy
with respect to all or any part of the Guaranteed Indebtedness; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Indebtedness; (iii) any release, non-perfection, or invalidity of
any indirect or direct security for the obligations of the Borrower for all or any part of the Guaranteed Indebtedness or any obligations of any other guarantor of or other person liable for any of the Guaranteed Indebtedness; (iv) any action
or failure to act by the Lender with respect to any collateral securing any part of the Guaranteed Indebtedness; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Indebtedness, or
any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible
payment in full in cash of the Guaranteed Indebtedness). 
 Section 11.04 Defenses Waived. To the fullest extent
permitted by applicable law, each Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any Guarantor or the unenforceability of all or any part of the Guaranteed Indebtedness from any cause, or the cessation
from any cause of the liability of the Borrower or any Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Indebtedness. Without limiting 

  
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the generality of the foregoing, each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein,
as well as any requirement that at any time any action be taken by any person against any Obligated Party, or any other person. The Lender may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales,
accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Indebtedness, compromise or adjust any part of the Guaranteed Indebtedness,
make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Guarantor under this Article XI except to the
extent the Guaranteed Indebtedness have been fully and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though that election may operate, pursuant
to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against any Obligated Party or any security. 
 Section 11.05 Rights of Subrogation. No Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that
it has against any Obligated Party, or any collateral, until the Loan Parties and the Guarantors have fully performed all their obligations to the Lender. 
 Section 11.06 Taxes. All payments of the Guaranteed Indebtedness will be made by each Guarantor free and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if any Guarantor shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Guarantor shall make such deductions and (iii) such
Guarantor shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. 

Section 11.07 Maximum Liability. The provisions of this Article XI are severable, and in any action or proceeding involving
any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Article XI would otherwise be held or
determined to be avoidable, invalid or unenforceable on account of the amount of such Guarantor’s liability under this Article XI, then, notwithstanding any other provision of this Article XI to the contrary, the amount of such liability shall,
without any further action by the Guarantors or the Lender, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the
relevant Guarantor’s “Maximum Liability”. This Section with respect to the Maximum Liability of each Guarantor is intended solely to preserve the rights of the Lender to the maximum extent not subject to avoidance under
applicable law, and no Guarantor nor any other person or entity shall have any right or claim under this Section with respect to such Maximum Liability, except to the extent necessary so that the obligations of any Guarantor hereunder shall not be
rendered voidable under applicable law. Each Guarantor agrees that the Guaranteed Indebtedness may at any time and from time to time exceed the Maximum Liability of each Guarantor without impairing

  
 33 

 
this Article XI or affecting the rights and remedies of the Lender hereunder, provided that, nothing in this sentence shall be construed to increase any Guarantor’s obligations
hereunder beyond its Maximum Liability. 
 ARTICLE XII 

MISCELLANEOUS 
 Section 12.01 Notices. 
 (a) All notices and other communications
provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 
 (i) if to any Loan Party, to it at 5 Greenway Plaza, Suite 2700, Houston, Texas 77046, Attention of the Chief Financial Officer (Telecopy No. 713-369-7312); 

(ii) if to the Lender, to it at Hayman Capital Master Fund, L.P., 2101 Cedar Springs Road, Suite 1400, Dallas, Texas 75201, Attention:
Jeff Cate; and 
 (b) Notices and other communications to the Lender hereunder may be delivered or furnished by electronic
communications pursuant to procedures approved by the Lender. 
 (c) Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date
of receipt. 
 Section 12.02 Waivers; Amendments. No failure on the part of the Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or privilege, or any abandonment or discontinuance of steps to enforce such right, power or privilege, under any of the Loan Documents shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under any of the Loan Documents preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies of the Lender
hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an
agreement in writing entered into by the Borrower and the Lender. 
 Section 12.03 Expenses, Indemnity; Damage
Waiver. 
 (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Lender and its
Affiliates, including, without limitation, the reasonable fees, charges and disbursements of counsel and other outside consultants for the Lender, the reasonable travel, photocopy, mailing, courier, telephone and other similar expenses, and the cost
of audits and surveys and appraisals, in connection with the preparation, negotiation, execution, delivery and administration (both before and after the execution hereof and including advice of counsel to the Lender as to the rights and duties of
the Lender and the Lender with respect thereto) of this 

  
 34 

 
Agreement and the other Loan Documents and any amendments, modifications or waivers of or consents related to the provisions hereof or thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated), (ii) all costs, reasonable out-of-pocket expenses, Taxes, assessments and other charges incurred by the Lender in connection with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any other Loan Document or any other document referred to therein, (iii) all out-of-pocket expenses incurred by the Lender, including the fees, charges and disbursements of any counsel for the Lender, in
connection with the enforcement or protection of its rights in connection with this Agreement or any other Loan Document, including its rights under this Section, or in connection with the Loans made hereunder, including, without limitation, all
such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Loans. 
 (b) Each Loan
Party agrees to indemnify and hold harmless the Lender and each of its affiliates, partners, officers, directors, employees, agents, advisors, controlling persons, members and successors and assigns (each, an “Indemnitee”) from and
against any and all losses, claims, damages, liabilities and expenses to which any such Indemnitee may become subject arising out of or in connection with this Agreement, the DIP Orders or any other Loan Document or any related transaction or any
claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any such Indemnitee is a party thereto (and regardless of whether such matter is initiated by a third party or such Loan Party or any of its
affiliates or shareholders), and to reimburse each such Indemnitee upon demand for any reasonable legal or other reasonable out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing; provided that the
foregoing indemnity will not, as to any Indemnitee, apply to losses, claims, damages, liabilities or related expenses to the extent they are found by a final, nonappealable judgment of a court of competent jurisdiction to arise from the willful
misconduct or gross negligence of such Indemnitee. Notwithstanding any other provision of this Agreement, none of the Borrower, its Subsidiaries or any Indemnitee shall be liable for any indirect, special, punitive or consequential damages in
connection with its activities related to this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Loans or the use of the proceeds thereof. 

(c) All amounts due under this Section shall be payable promptly after written demand therefor. 

Section 12.04 Successors and Assigns. 
 (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void). 

(b) The Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement, and the
Loan Documents to secure obligations of the Lender, including, without limitation, any pledge or assignment to secure obligations to any Person. 

  
 35 

 Section 12.05 Survival; Revival; Reinstatement. 

(a) All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of the
Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on the Loans or any fee or any other amount payable under this Agreement is outstanding and unpaid. The provisions of Section 5.01 and
Section 12.03 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans or the termination of this Agreement, any other Loan Document or any provision
hereof or thereof. 
 (b) To the extent that any payments on the Indebtedness or proceeds of any collateral are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver or other Person under any bankruptcy law, common law or equitable cause, then to such extent, the Indebtedness so
satisfied shall be revived and continue as if such payment or proceeds had not been received and the Lender’s and the Lender’ Liens, security interests, rights, powers and remedies under this Agreement and each Loan Document shall continue
in full force and effect. In such event, each Loan Document shall be automatically reinstated and the Borrower shall take such action as may be reasonably requested by the Lender and the Lender to effect such reinstatement. 

Section 12.06 Counterparts; Integration; Effectiveness. 

(a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract. 
 (b) This Agreement, the DIP
Orders and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter
hereof and thereof. THIS AGREEMENT, THE DIP ORDERS AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 
 (c) Except as provided in Section 6.01,
this Agreement shall become effective when it shall have been executed by the Lender and when the Lender shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, facsimile or other similar electronic means
shall be effective as delivery of a manually executed counterpart of this Agreement. 

  
 36 

 Section 12.07 Severability; Conflicts. Any provision of this Agreement or any
other Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. It is agreed that the provisions of this Agreement
and of other Loan Documents shall be subject in all respects to the terms and provisions of the DIP Orders, and in the event that any provision in this Agreement or any other Loan Document is in direct conflict with, or inconsistent with, any
provisions of any DIP Order, the provisions of such DIP Order shall govern and control. 
 Section 12.08 Governing Law;
Jurisdiction; Jury Trial Waiver. 
 (a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK AND TO THE EXTENT APPLICABLE THE BANKRUPTCY CODE. 
 (b) All judicial proceedings
brought against any Loan Party arising out of or relating to this Agreement or any other Loan Document, or any Indebtedness hereunder and thereunder, may be brought in the Bankruptcy Court and, if the Bankruptcy Court does not have (or abstains
from) jurisdiction, the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof. Each Loan Party hereby irrevocably and unconditionally:
(a) submits for itself and its property in any such legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non
exclusive general jurisdiction of such the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead
or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the applicable
Loan Party at its address set forth in Section 12.01 or at such other address of which the Lender shall have been notified pursuant thereto; and (d) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages. 
 (c) EACH LOAN PARTY AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN. 

  
 37 

 Section 12.09 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 

Section 12.10 Confidentiality. The Lender agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) subject to agreement containing provisions substantially the same as those of this Section, to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal
counsel and other advisors, (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement or
any other Loan Document, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to agreement containing provisions substantially the same as those of this Section, to any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations
under this Agreement, (g) subject to agreement containing provisions substantially the same as those of this Section, to any investor or prospective investor of the Lender or the Lender’s Affiliates, (h) subject to agreement
containing provisions substantially the same as those of this Section, to any financing sources of the Lender or its Affiliates and to the agents or representatives of such financing sources and to any rating agency, collateral management servicer
or other such service provider in connection with any financing that the Lender (or its Affiliates) may obtain, (i) with the consent of the Borrower, or (j) to the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section, “Information” means all information received from or
on behalf of the Borrower or any Subsidiary relating to the Borrower or any Subsidiary and their businesses, other than any such information that is available to the Lender on a nonconfidential basis prior to disclosure by the Borrower or a
Subsidiary; provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person
would accord to its own confidential information. Notwithstanding anything herein to the contrary, “Information” shall not include, and the Borrower, the Borrower’s Subsidiaries, the Lender, the Lender and the respective Affiliates of
each of the foregoing (and the respective partners, directors, officers, employees, agents, advisors and other representatives of the aforementioned Persons), and any other party, may disclose to any and all Persons, without limitation of any kind
(a) any information with respect to the U.S. federal and state income tax treatment of the transactions contemplated hereby and any facts that may be relevant to understanding the U.S. federal or state income tax treatment of such transactions
(“tax structure”), which facts shall not include for this purpose the names of the parties or any other person named herein, or information that would permit identification of the parties or such other persons, or any pricing terms or
other nonpublic business or financial information that is unrelated to such tax treatment or tax structure, and (b) all materials of any kind (including opinions or other tax analyses) that are provided to the Borrower, the Lender relating to
such tax treatment or tax structure. 

  
 38 

 Section 12.11 Interest Rate Limitation. It is the intention of the parties
hereto that the Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby would be usurious as to the Lender under laws applicable to it (including the laws of the United States of America and
the State of Texas or any other jurisdiction whose laws may be mandatorily applicable to the Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in any of the Loan Documents
or any agreement entered into in connection with or as security for the Loans, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under law applicable to the Lender that is contracted for, taken,
reserved, charged or received by the Lender under any of the Loan Documents or agreements or otherwise in connection with the Loans shall under no circumstances exceed the maximum amount allowed by such applicable law, and any excess shall be
canceled automatically and if theretofore paid shall be credited by the Lender on the principal amount of the Indebtedness (or, to the extent that the principal amount of the Indebtedness shall have been or would thereby be paid in full, refunded by
the Lender to the Borrower); and (ii) in the event that the maturity of the Loans is accelerated by reason of an election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes interest under law applicable to the Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically by the Lender as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by the Lender on the principal amount of the Indebtedness (or, to the extent that the
principal amount of the Indebtedness shall have been or would thereby be paid in full, refunded by the Lender to the Borrower). All sums paid or agreed to be paid to the Lender for the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by law applicable to the Lender, be amortized, prorated, allocated and spread throughout the stated term of the Loans evidenced by the Loans until payment in full so that the rate or amount of interest on account of the Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time (i) the amount of interest payable to the Lender on any date shall be computed at the Highest Lawful Rate applicable to the Lender
pursuant to this Section and (ii) in respect of any subsequent interest computation period the amount of interest otherwise payable to the Lender would be less than the amount of interest payable to the Lender computed at the Highest Lawful
Rate applicable to the Lender, then the amount of interest payable to the Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to the Lender until the total amount of
interest payable to the Lender shall equal the total amount of interest which would have been payable to the Lender if the total amount of interest had been computed without giving effect to this Section. To the extent that Chapter 303 of the Texas
Finance Code is relevant for the purpose of determining the Highest Lawful Rate applicable to a Lender, the Lender elects to determine the applicable rate ceiling under such Chapter by the weekly ceiling from time to time in effect. Chapter 346 of
the Texas Finance Code does not apply to the Borrower’s obligations hereunder. 
 Section 12.12 No Third Party
Beneficiaries. This Agreement, the other Loan Documents, and the agreement of the Lender to make Loans hereunder are solely for the benefit of the Borrower, and no other Person (including, without limitation, any Subsidiary of the Borrower, any
obligor, contractor, subcontractor, supplier or materialsman) shall have any rights, claims, remedies or privileges hereunder or under any other Loan Document against the Lender for any reason whatsoever. There are no third party beneficiaries
(other than the Indemnitees as set forth in Section 12.03). 

  
 39 

 Section 12.13 USA Patriot Act Notice. Each Lender hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information that will allow the Lender to identify the Borrower in accordance with the Act. 
 [SIGNATURES BEGIN NEXT PAGE] 

  
 40 

 The parties hereto have caused this Agreement to be duly executed as of the day and year
first above written. 
  

							
	BORROWER:	 		 	SEAHAWK DRILLING, INC.
				
		 		 	By:	 	 /s/ James R. Easter

		 		 	Name:	 	James R. Easter
		 		 	Title:	 	Chief Financial Officer and Senior Vice President
			
	GUARANTORS:	 		 	SEAHAWK DRILLING LLC
				
		 		 	By:	 	 /s/ James R. Easter

		 		 	Name:	 	James R. Easter
		 		 	Title:	 	Vice President
			
		 		 	SEAHAWK GLOBAL HOLDINGS LLC
				
		 		 	By:	 	 /s/ James R. Easter

		 		 	Name:	 	James R. Easter
		 		 	Title:	 	Vice President
			
		 		 	SEAHAWK MEXICO HOLDINGS LLC
				
		 		 	By:	 	 /s/ James R. Easter

		 		 	Name:	 	James R. Easter
		 		 	Title:	 	Vice President
			
		 		 	SEAHAWK DRILLING MANAGEMENT LLC
				
		 		 	By:	 	 /s/ James R. Easter

		 		 	Name:	 	James R. Easter
		 		 	Title:	 	Vice President
			
		 		 	SEAHAWK OFFSHORE MANAGEMENT LLC
				
		 		 	By:	 	 /s/ James R. Easter

		 		 	Name:	 	James R. Easter
		 		 	Title:	 	Vice President

							
		 		 	ENERGY SUPPLY INTERNATIONAL LLC
				
		 		 	By:	 	 /s/ James R. Easter

		 		 	Name:	 	James R. Easter
		 		 	Title:	 	Vice President
			
		 		 	SEAHAWK DRILLING USA LLC
				
		 		 	By:	 	 /s/ James R. Easter

		 		 	Name:	 	James R. Easter
		 		 	Title:	 	Vice President

  
 2 

							
	LENDER:	 		 	HAYMAN CAPITAL MASTER FUND, L.P.
			
		 		 	By: Hayman Investments, LLC, its general partner
				
		 		 	By:	 	 /s/ Debby LaMoy

		 		 	Name:	 	 Debby LaMoy

		 		 	Title:	 	 Chief Operating Officer

  
 3KNOW-HOW
LICENSE AND STOCK PURCHASE AGREEMENT

THIS
AGREEMENT is made and entered into as of the day it has been signed by both parties below

by
and between:

Regenicin,
Inc., having a principal address at 10 High Court, Little Falls, NJ 07424 (hereafter Regenicin); and Lonza Walkersville,
Inc., having a principal address at 8830 Biggs Ford Road, Walkersville, MD 21793 (hereafter LWI or Lonza);

    	 

    	 

    

INDEX
OF ARTICLES

1DEFINITIONS

2OBLIGATIONS
OF THE PARTIES

3KNOW-HOW

4GRANT

5PATENT
RIGHTS

6PAYMENTS

7MANUFACTURING

8CLINICAL
TRIALS

9STOCK
PURCHASE AGREEMENT

10DISTRIBUTION

11PAYMENTS

12CONFIDENTIALITY

13TERM
AND TERMINATION

14INFRINGEMENT
AND INDEMNITY

15MISCELLANEOUS

    	2

    	 

    

INDEX
OF EXHIBITS

Exhibit
A - List of Patent Rights

Exhibit
B - Hourly rate for calculation of cost of Future Know-How

Exhibit
C – AFIRM Grant Application

Exhibit
D - The Amended and Restated Exclusive License Agreement between The Regents of the University of California and Cutanogen Corporation.

Exhibit
E – The First Amendment to the Amended and Restated Exclusive License Agreement between The Regents of the University of
California and Cutanogen Corporation.

Exhibit
F - The License Agreement between Cutanogen Corporation on the one hand and the University of Cincinnati and Shriners Hospitals
for Children on the other hand.

Exhibit
G – Amendment to the License Agreement between Cutanogen Corporation on the one hand and the University of Cincinnati and
Shriners Hospitals for Children on the other hand..

Exhibit
H - Settlement Agreement and Release dated February 2, 2006 between the Shriners Hospital for Children, Cutanogen Corporation,
the Shareholders of Cutanogen Corporation, and Cambrex Bio Science Walkersville, Inc.

Exhibit
I - Manufacturing Agreement.

Exhibit
J - Stock Purchase Agreement.

    	3

    	 

    

WHEREAS,
LWI owns all of the issued and outstanding capital stock of Cutanogen Corporation;

WHEREAS,
LWI is engaged in the research and development of products used in the life sciences industry, including engineered skin substitute
called PermaDermTM;

WHEREAS,
Regenicin wishes to assume responsibility for developing PermaDermTM, and to purchase the outstanding capital stock of Cutanogen
Corporation;

NOW,
THEREFORE, in consideration of the promises and of the mutual covenants and agreements herein set forth, the parties hereto
agree as follows:

Article
1. Definitions

1.1          
"Affiliate" means any corporation, company or other entity which directly or indirectly controls, is controlled by,
or is under common control with, LWI or Regenicin. For the purpose of this definition, the word "control" shall mean
the direct or indirect ownership of more than fifty percent (50%) of the outstanding voting stock of the corporation, company,
or other entity.

1.2          
"Contract Product" means the autologous engineered skin supplement known as PermaDermTM. 

1.3          
“Current Know-How” means Know-How that is in the possession of LWI, and that exists on the effective date of this
Agreement.

1.4          
“Future Know-How” means Know-How that is developed after the effective date of this Agreement by LWI at the reasonable
request of Regenicin.

1.5          
“Know-How” means information in support of a clinical trial for the Contract Product, including, without limitation,
information relating to product specifications, manufacturing, testing, facilities, etc. Know-How includes, but is not limited
to, Master Batch Records and SOP’s. 

1.6          
“Patent Rights" shall mean all patents and patent applications in any country or region of the world that cover Contract
Product, and that are owned by or are licensed to, LWI including, without limitation, the patents and patent applications that
were licensed by LWI from the University of California, and from the University of Cincinnati and the Shriners Hospital for Children.
A partial list of Patent Rights is set forth in Exhibit A. 

Article
2. Obligations of the Parties

2.1This
Agreement shall only become effective upon Lonza’s receipt of payment in full to be made by Regenicin of the amount due
under paragraph 6.1 below (the “Effective Date”).

2.2During
the term of this Agreement, the obligations of LWI shall include, without limitation:

a.
produce and transfer Future Know-How to Regenicin in accordance with paragraph 3.2 below;

b.
monitor prosecution and maintenance of Patent Rights in accordance with paragraph 5.2 below;

c.
maintain the Licenses, as defined below; and

d.
execute the Stock Purchase Agreement in accordance with Article 9.1 below.

2.3During
the term of this Agreement, the obligations of Regenicin shall include, without limitation:

a.
reimburse LWI for transferring Current Know-How in accordance with paragraph 6.1 below

b.
conduct pre-clinical and clinical trials in accordance with paragraph 8.1 below;

c.
apply for and obtain approval from the FDA for commercial sales of Licensed Product in accordance with paragraph 8.1 below;

d.
reimburse LWI for providing Future Know-How in accordance with paragraph 3.3 below;

e.
reimburse LWI for monitoring prosecution of Patent Rights in accordance with paragraph 5.6 below;

f.
reimburse LWI for maintaining the Licenses in according with paragraph 5.7 below; and

g.
execute the Stock Purchase Agreement in accordance with Article 9.1 below.

h.
Pay the purchase price for the outstanding capital stock of Cutanogen Corporation in according with paragraph 6.2 below.

    	4

    	 

    
Article
3. Know-How

3.1Regenicin
acknowledges LWI has transferred the Current Know-How.

3.2Upon
the reasonable request of Regenicin, LWI shall produce and transfer to Regenicin Future Know-How.

3.3LWI
shall send invoices to Regenicin for expenses related to the production and transfer to Regenicin of Future Know-How at a rate
based on the number of hours spent by employees of LWI in accordance with the rate provided in Exhibit B, which may be updated
from time to time by Lonza.

Article
4. Grant

4.1LWI
grants to Regenicin, and Regenicin accepts, an exclusive license to use Know-How for the sole purposes of seeking FDA approval
and, upon such approval, to use, market, offer for sale, sell and otherwise dispose of the Contract Product on a worldwide basis,
subject to the terms of this Agreement. Notwithstanding the foregoing, to the extent that any grant of rights to Regenicin hereunder
would constitute a transfer, assignment or sublicense of Lonza’s or Cutanogen Corporation’s right, interest or title
in intellectual property that would trigger any milestone payments under the Stock Purchase Agreement, dated December 2005, by
and among Lonza, Cutanogen Corporation and the shareholders of Cutanogen Corporation, then such portion of such grant shall be
of no force and effect.

4.2No
licenses or rights, including, without limitation, sublicenses under the Licenses, other than those explicitly granted hereunder
are, or shall be deemed to have been, granted under this agreement.

4.3LWI
applied for a grant from the Armed Forces Institute of Regenerative Medicine relating to the Contract Product on March 3, 2009
(hereafter AFIRM Grant Application, attached hereto as Exhibit C). Any money received by Lonza during the term of this agreement
as a result of the AFIRM Grant Application shall be applied by LWI to development of the Contract Product in compliance with the
conditions of the grant, and the results thereof transferred to Regenicin to the extent permitted under the grant.

4.4LWI
applied for a grant from the Department of Defense relating to the Contract Product (hereafter DoD Grant Application). Any money
received by Lonza during the term of this agreement as a result of the DoD Grant Application or any other grant relating to the
Contract Product shall be applied by LWI to development of the Contract Product in compliance with the conditions of such grant,
and the results thereof transferred to Regenicin to the extent permitted under such grant.

4.5With
respect to the AFIRM grant and any other grant that Lonza or its affiliates receives relating to the Contract Product, including,
but not limited to, any grant from the Department of Defense, Lonza or its affiliate(s), as the case may be, shall control all
such grants and shall be the only point of contact or interface with the grantor. Regenicin shall not be permitted to communicate,
directly or indirectly, with the grantor without the express written permission of Lonza.

    	5

    	 

    
Article
5. Patent Rights

5.1The
parties acknowledge that certain Patent Rights relating to the Contract Product were licensed to LWI in the following agreements
(hereafter, collectively, the Licenses):

Amended
and Restated Exclusive License Agreement between The Regents of the University of California and Cutanogen Corporation for “Living
Human Skin Replacements and Cultured Skin Substitutes” effective March 3, 2001 (hereafter California Agreement, attached
hereto as Exhibit D;

First
Amendment to the Amended and Restated Exclusive License Agreement between The Regents of the University of California and Cutanogen
Corporation effective November 23, 2005 (hereafter California Amendment, attached hereto as Exhibit E;

License
Agreement between Cutanogen Corporation on the one hand and the University of Cincinnati and Shriners Hospitals for Children on
the other hand, effective as of August 24, 1998 (hereafter Cincinnati/SHC agreement), attached hereto as Exhibit F; and

Amendment
to License Agreement between Cutanogen Corporation on the one hand and the University of Cincinnati and Shriners Hospitals for
Children on the other hand, effective as of December 29, 2005 (hereafter Cincinnati/SHC amendment), attached hereto as Exhibit
G.

5.2LWI
shall continue to monitor the prosecution and maintenance of Patent Rights that were licensed to LWI under the Licenses, and shall
use its reasonable best efforts to obtain effective patent protection for the Contract Product under Patent Rights licensed thereunder.

5.3Upon
execution of the Stock Purchase Agreement in accordance with paragraph 9.1 below, the California Agreement and the California
Amendment will be assigned to Regenicin, subject to the written consent of the University of California in accordance with paragraph
22 of the California Agreement.

5.4Upon
execution of the Stock Purchase Agreement in accordance with paragraph 9.1 below, the Cincinnati/SHC Agreement and the Cincinnati/SHC
Amendment will be assigned to Regenicin, subject to the prior consent of the University of Cincinnati and Shriners Hospitals for
Children in accordance with paragraph 14.4 of the Cincinnati/SHC Agreement.

5.5Following
the execution of the Stock Purchase Agreement in accordance with paragraph 9.1 below, LWI will use reasonable efforts to obtain,
at Regenicin’s sole expense, any consent required as a condition to the assignment of the California Agreement, the California
Amendment, the Cincinnati/SHC Agreement and the Cincinnati/SHC Amendment.

5.6LWI
shall send invoices to Regenicin for all expenses related to the prosecution and maintenance of Patent Rights.

5.7LWI
shall send invoices to Regenicin for all expenses related to the maintenance of the Licenses, including, without limitation, the
license maintenance fee of Article 6 of the California Agreement.

    	6

    	 

    
Article
6. Payments

6.1Regenicin
shall pay to LWI $3,000,000 (three million dollars) as consideration for Current Know-How and other value transferred or to be
transferred by Lonza to Regenicin.

6.2Regenicin
shall pay to LWI $2,000,000 (two million dollars) upon approval by the United States Food and Drug Administration of the commercial
sale of the Contract Product as the purchase price of the outstanding capital stock of Cutanogen Corporation transferred to Regenicin
under the Stock Purchase Agreement in accordance with paragraph 9.1 below.

6.3Regenicin
shall pay to LWI 33% (thirty three percent) of any money received by Lonza or its affiliates during the term of this Agreement
as a result of the AFIRM grant application in consideration for the development of the Contract Product conducted by LWI, and
the transfer of the results thereof to Regenicin in accordance with paragraph 4.3 above.

6.4Regenicin
shall pay to LWI 33% (thirty three percent) of any money received by Lonza or its affiliates during the term of this Agreement
as a result of any other grant application(s), including, but not limited to, as a result of any Department of Defense grant application,
in consideration for the development of the Contract Product to be conducted by LWI, and the results thereof to be transferred
to Regenicin in accordance with paragraph 4.4 above, with such payment to be made upon receipt of such grant.

6.5Regenicin
shall be responsible for any milestone payments that are owed, whether upon execution of the Stock Purchase Agreement in accordance
with paragraph 9.1 below or otherwise, as well as any milestone payments that, but for this Agreement, would not have been owed
by LWI to one or more, including all, former owners of Cutanagen Corporation, including, without limitation, Stephen Boyce, the
University of Cincinnati and the Shriners Hospital for Children. Milestone payments covered under this paragraph 6.5 include,
without limitation, any milestone payments would have been owed under the Settlement Agreement and Release dated February 2, 2006
between the Shriners Hospital for Children, Cutanogen Corporation, the Shareholders of Cutanogen Corporation, and Cambrex Bio
Science Walkersville, Inc. (Exhibit H).

Article
7. MANUFACTURING

7.1During
the term of this Agreement and following execution of the Stock Purchase Agreement in accordance with paragraph 9.1 below, LWI
will retain the exclusive right to manufacture Contract Product at a customary margin level as more definitively set forth in
the Manufacturing Agreement attached hereto as Exhibit I. Regenicin shall order amounts of Contract Product from LWI for clinical
trial, and LWI shall manufacture Contract Product in accordance with the Manufacturing Agreement.

7.2Regenicin
shall pick up the Contract Product manufactured by LWI in accordance with Paragraph 7.1 above, and shall arrange for transportation
from a facility designated by LWI to a facility designated by Regenicin for each delivery of Contract Product. All costs, taxes
and other expenses relating to such delivery and transport, including, without limitation, insurance premiums, shall be at Regenicin's
expense.

7.3Title,
and risk of loss or damage, to any shipment of Contract Product shall belong to Regenicin upon pick up of Contract Product by
Regenicin in accordance with Paragraph 7.2 above.

7.4If,
at any time following execution of the Stock Purchase Agreement in accordance with paragraph 9.1 below, LWI is, for any reason,
unable or unwilling to supply Regenicin’s reasonable requirements for commercial supply of Contract Product and notifies
Regenicin to that effect, LWI agrees that Regenicin may then have the Contract Product manufactured by one or more third parties
to the extent necessary in order to permit Regenicin to obtain supply of its requirements of Contract Product (and the license
grant set forth in paragraph 4.1 above shall be deemed to be modified to the extent necessary for such purpose).

    	7

    	 

    

Article
8. Clinical Trials

8.1.During
the term of this Agreement, Regenicin shall prepare for and conduct pre-clinical and clinical trials. Regenicin shall use its
best efforts during such trials to obtain approval from the FDA for the commercial sale of Contract Product.

8.2LWI
will support the pre-clinical and clinical trials conducted by Regenicin in accordance with paragraph 8.1 above by providing Current
Know-How and Future Know-How in accordance with Article 3 above.

Article
9. Stock Purchase Agreement

9.1Upon
payment by Regenicin to LWI of the milestone payments provided for in paragraphs 6.2 and 6.5 above, Regenicin and LWI shall execute
the Stock Purchase Agreement attached hereto as Exhibit J. For the sake of clarity, the Stock Purchase Agreement shall not be
effective until all of the milestones due under paragraphs 6.2 and 6.5 above are paid in full.

Article
10. Distribution

10.1After
execution of the Stock Purchase Agreement, LWI will retain exclusive distribution rights for the sale of the collagen sponge of
the Contract Product to a third party in accordance with a Distribution Agreement to be negotiated by the parties in good faith.
Under the Distribution Agreement, LWI will keep 15% of the sale price as a logistics/distribution fee. Any remaining profit from
the sale of the collagen sponge will be split equally between the parties.

10.2The
Distribution Agreement will contain a grant by Regenicin to LWI of a worldwide, transferable, non-revocable license under intellectual
property owned by or licensed to Regenicin enabling LWI to satisfy its obligations to manufacture Contract Product under paragraph
7.1 above and to distribute Contract Product under paragraph 10.1 above.

Article
11. Payments

11.1Except
for payment under paragraph 6.1, which is due concurrently with the execution hereof, all payments due in accordance with this
agreement shall be made in United States dollars within thirty (30) days of the due date or, as the case may be, of the invoice
date. Invoices shall be sent to Regenicin and payments shall be made to LWI at the addresses provided in paragraph 15.5 below.

Article
12. Confidentiality

12.1Each
party acknowledges and agrees that the other party (hereinafter the "Donor Party") owns certain confidential information
regarding the Contract Product.

12.2Confidential
Information shall mean all information regarding the Contract Product that is hereafter received by a party to this Agreement
(hereinafter the "Receiving Party") from the Donor Party, except that which:

(a)was
in the public domain prior to the receipt under this Agreement, or thereafter becomes part of the public domain through no fault
of the Receiving Party; or

(b)the
Receiving Party can show, by credible written records, was in its possession at the time of receipt under this Agreement; or

(c)is
received by the Receiving Party from a third party that is not under an obligation to the Donor Party to maintain the information
in confidence.

12.3All
Confidential Information received under this Agreement shall be maintained by the Receiving Party in confidence and shall not
be disclosed to any other person or entity without prior written approval of the Donor Party, except as is necessary for the Receiving
Party to carry out its obligations under this Agreement.

12.4All
physical material containing Confidential Information shall be returned to the Donor Party prior to or immediately upon any termination
of this Agreement, provided however, that the Receiving Party may retain one copy of written materials containing Confidential
Information strictly for use as a record of information disclosed by the Donor Party, and to be used for no other purpose without
the Donor Party's express written consent.

12.5The
Receiving Party hereby indemnifies and holds harmless the Donor Party against any loss resulting from unauthorized disclosure
or use of the Confidential Information by the Receiving Party, its agents, or others to whom the Confidential Information has
been disclosed by the Receiving Party pursuant to this Agreement.

    	8

    	 

    
Article
13. Term And Termination

13.1Unless
otherwise terminated as provided hereunder, this Agreement shall become effective in accordance with paragraph 2.1 and remain
in force from its Effective Date until execution of the Stock Purchase Agreement in accordance with Article 9.1 above.

13.2In
the event either party fails or refuses to perform any of its obligations hereunder (hereafter the Defaulting Party), the other
party (hereafter the Terminating Party) may, without waiving any other rights, terminate this agreement.

13.3If
the Terminating Party wishes to terminate this agreement in accordance with paragraph 13.2 above, the Terminating Party shall
first provide the Defaulting Party with written notice specifying the particulars of such failure or refusal. This Agreement shall
terminate thirty (30) days after receipt of such notice by the Defaulting Party unless, within such thirty (30) day period, the
default is fully remedied. Notwithstanding the foregoing, this Agreement may be terminated immediately (i) by the non-Defaulting
Party in the event the Defaulting Party breaches paragraph 12 above or (ii) by Lonza in the event Regenicin breaches paragraph
11.1.

 

13.4Termination
of this Agreement shall not relieve either party to this Agreement of its obligations to make any payment that accrue hereunder
prior to such termination, or of its obligations of confidentiality in accordance with Article 12 above.

13.5In
the event this Agreement is terminated earlier than provided for in paragraph 13.1 above by either party for any reason, any money
transferred to LWI by Regenicin in accordance with Article 6 above shall be non-refundable.

13.6In
the event this Agreement is terminated earlier than provided for in paragraph 13.1 above by either party for any reason, Regenicin
shall return all Current Know-How and Future Know-How to LWI, and will not use Current Know-How or Future Know-How for any purpose.

Article
14. Infringement and Indemnity

14.1LWI
represents to Regenicin that, at the time this Agreement is entered into, LWI has no knowledge of any proprietary right that is
owned by a third party that would be infringed by Regenicin's sale or use of Contract Product pursuant to this Agreement. However,
LWI does not represent or warrant that Regenicin will not be subject to claims by a third party for infringement of a third party's
proprietary rights of which LWI is unaware at the time this Agreement.

14.2Regenicin
agrees to hold harmless, defend and indemnify LWI against all damage, claim, expense and liability, including attorney fees, arising
in any way from (i) the offering to sell, sale, or use of Contract Product by Regenicin or its agents or (ii) any actions whatsoever
taken by Regenicin, its affiliates, or any of its or its affiliates’ respective officers, directors, employees, agents,
consultants, independent contractors or representatives in connection with this Agreement, the Contract Product, or Lonza’s
(or its affiliates’) relationship with Regenicin.

    	9

    	 

    
Article
15. Miscellaneous

15.1This
Agreement shall be governed by and construed in accordance with the laws of The State of New York, without regard to its conflicts
of laws rules.

15.2This
Agreement may only be amended in writing signed by both parties. There are no other understandings, agreements or representations,
express or implied, not specified herein. If any provision of this Agreement is held to be unenforceable, such provision shall
not render this Agreement or any other provision thereof unenforceable. In the event a provision of this Agreement is held to
be unenforceable, the parties shall negotiate in good faith so that such unenforceable provision may be replaced by another provision
of similar, but enforceable, effect. If such a replacement is not possible or cannot be agreed upon, the parties will negotiate
in good faith so that the value of this Agreement to both parties remains the same despite the loss of the provision held to be
unenforceable.

15.3Regenicin
shall not use the name Lonza or LWI or the trade name of a Lonza or LWI product without the express written consent of LWI.

15.4This
Agreement shall not be assigned by either party to this Agreement to a third party without the written consent of the other party
to this Agreement, such consent not to be unreasonably withheld.

15.5Any
notice required to be given under this Agreement shall be in writing, and shall be deemed to have been received on the day the
notice has been transmitted by facsimile to the correct facsimile number, or three days after deposit in the mail, postage prepaid
for first class mail, whichever occurs first. All mail shall be addressed as follows:

	If
    to Regenicin:	If
    to LWI:
	Regenicin,
    Inc.	Lonza
    Walkersville, Inc.   
	10
    High Court	8830
    Biggs Ford Road
	Little
    Falls, NJ  07424	Walkersville,
    MD 21793
	Attn:
    Randal McCoy	Attn:
    David Smith
		
	With
    a copy to:	With
    a copy to:
		
	Stevens
    & Lee	Lonza
    America, Inc.
	100
    Lenox Drive, Suite 200	25
    Commerce Drive
	Lawrenceville,
    NJ 08648	Allendale,
    NJ 07401
	Attn:
    Richard J. Pinto, Esq.	Attn:
    General Counsel
	
	or
    to such other address as may be specified from time to time in a written notice.

 

[remainder
of page intentionally left blank]

    	10

    	 

    

 

	Regenicin, Inc.	Lonza Walkersville, Inc.
	 	 
	By:	By:
	Name: Randall McCoy	Name:
	Title: Chief Executive Officer	Title:
	Date:	Date:

    	11

    	 

    

Exhibit
A – List of Patent Rights

    	12

    	 

    

 

    	13

    	 

    

Exhibit
B – Hourly Rate for calculation of cost of Future Know-How

    	14

    	 

    

Lonza

 

Lonza Cell
Therapy – 2009 Fee Schedules

 

Labor

 

	Description	Rate	 	 	 	 
	Copying
    or scanning of records or printed materials at the request of the Client	$85
    per hour	 	 	 	 
	Project Management
    and Technical Documentation 
This labor rate is for document preparation, technical writing, batch record review, product release,
    quality reporting, project management, and other technical non-laboratory project related activities as specified by the client	$150
    per hour	 	 	 	 
	Tech Transfer
    Labor 
This labor rate includes production for tech transfer activities and training runs in a training laboratory	$250
    per hour  (suite fees do not apply to unclassified labor)	 	 	 	 
	Clinical Production
    Labor 
Production of engineering and clinical materials in a cGMP clinical, commercial, or EU suite	$190
    per hour + applicable suite fees	 	 	 	 
	Specialist Labor
    
Validation, Regulatory, and/or Tissues Acquisition consulting activities	$300
    per hour	 	 	 	 
	Process Development
    and Bioservices Labor 
Development activities such as process scale up, assay development, media optimization, performance
    of bioassays and stability studies	$325
    per hour	 	 	 	 
	On-Call Services
    Surcharge 
Services requested by the client specifically related to production during off-business hours. Applies to all manufacturing
    services after 11p.m. and before 6 a.m. as well as for QA/QC services after 6p.m. and before 8a.m	$500
    per day per person ( in addition to above labor rate)	 	 	 	 

 

Other Fees

 

	Description	Fees	 	 	 	 
	Security Deposit
    
Required before Technology Transfer to assure scheduled production and laboratory time	20%
    of project cost, or $100,000, whichever is less	 	 	 	 
	Standard Regulatory
    Prices 
CMC Section, preparation of new DMF – template document describing the LWI manufacturing facility, support of
    Biologic License Application (BLA) filing	$17,500 for IND
    
$50,000 for BLA	 	 	 	 
	Consumables /
    Materials (non-GMP) 
Standard consumable fee capturing all handling and entrance costs for process and assay development	Cost
    + 15 %	 	 	 	 
	Consumables /
    Materials (cGMP) 
Standard consumable fee capturing all handling and entrance costs for cGMP production or testing	Cost
    + 20 %	 	 	 	 

 

CONFIDENTIAL

    	15

    	 

    

 

Lonza

Facilities

	Description	Shared	Dedicated
	Weekly	Monthly	Weekly	Monthly
	Production

        Suite
	Small
    Clinical	$24,000	$80,000	$38,000	$140,000
	Large
    Clinical	$26,000	$100,000	$48,000	$175,000
	Commercial
    & EU	$35,000	$125,000	$62,000	$225,000

 

*There is
a minimum booking requirement of 1 week in order to transition projects in and out of production suites.

 

Storage
Rates

 

Post Production
Storage of Product: LWI will store in-process, quarantine, and released product for the client in a validated, monitored, controlled
Refrigerator, Freezer (<-20 °C), Ultra Low Freezer (<-70 °C) or LN2 freezer at the cost outlined below:

 

Sample Storage
Fee (based on total number of samples stored)

 

	Number
    of Samples	Price
	<
    500 samples	$200.00
    / month
	501
    – 1,000 samples	$300.00
    / month
	1,001
    – 2,000 samples	$400.00
    / month
	2,001
    – 5,000 samples	$500.00
    / month
	5,001
    – 10,000 samples	$650.00
    / month

 

LN2 Storage:
LWI imposes an additional recurring monthly fee for LN2 freezer unit maintenance and storage of samples. These fees are dependent
upon the ownership of the LN2 freezer unit:

 

	LWI-owned
    unit	$800.00
    / month
	Client-owned
    unit	$400.00
    / month

 

Storage
rates take effect at the beginning of the month following completion of production. Rates are then prorated upon removal of product
from storage.

 

CONFIDENTIAL

    	16

    	 

    

Lonza

 

Shipping
Rates

 

Post Production
Shipment of Product: LWI will ship in-process, quarantine, or released product

for a shipping
fee plus freight. Client may designate carrier and may use their account number

for direct
billing of freight charges. LWI shipping fees are outlined below:

 

	Shipping
    Condition	Price
	Ambient	$100.00
    / shipment
	Refrigerated
    (2-8 °C)	$100.00
    / shipment
	Frozen
    (<-10 °C)	$125.00
    / shipment
	Dry
    Ice (<-70 °C)*	$150.00
    / shipment
	LN2
    Shipper (<-140 °C)*	$250.00
    / shipment

 

*Freight
is charged for both outbound and return shipments if the container is reusable.

 

Testing
Rates

 

	Testing	Test
    Code	List
    Price
	Sterility
    - USP/EP Final Product Testing, Direct Method	6595	$608.00
	Sterility
    - USP/EP Qualification Test, Direct Method (Bacteriostasis & Fungistasis)	6719	$1,750.00
	Sterility
    - Final Container Testing, Membrane Filtration	1226	$608.00
	Sterility
    - Qualification Test, Membrane Filtration (Bacteriostasis & Fungistasis)	6718	$1,750.00
	Mycoplasma-
      Detection Assay, FDA PTC	6606	$1,300.00
	Mycoplasma
    - Qualification of the Test Article for Detection Assay,  FDA PTC	7612	$4,620.00
	Endotoxin
    - FDA end product release	6422	$285.00
	Endotoxin
    - Qualification of the Test Article, FDA PTC	80-501	$630.00
	Flow
    Cytometry Test (up to 4 markers)	7621	$1,800.00
	Flow
    Cytometry Test (each additional marker)	7622	$450.00
	Sample
    Handling- Submission of Sample Back to Client	7623	$110.00
	Cell
    Bank Amp - Cell Count (Hemacytometer)	6347	$400.00
	Contract
    Lab Sample Processing	6348	$140.00
	Guava
    Cell & Viability Count	6445	$288.00
	Bioburden-
    General	6428	$795.00

 

Note: Other
test development and testing is available. Please inquire regarding current rates.

 

CONFIDENTIAL

    	17

    	 

    

Exhibit
C – AFIRM Grant Application

Lonza

 

02 March
2009

 

Prof. David
Devore

Chief Operating
Officer

CeMAR and
RCC Consortium of AFIRM

NJ Center
for Biomaterials

145 Bevier
Road

Piscaraway,
NJ 08854

 

Dear Professor
Devore:

 

On behalf
of Lonza Walkersville Inc. (LWI) we submit our grant proposal titled “Expedited availability of autologous engineered human
skin for treatment of burned soldiers” to the Rutgers – Cleveland Clinic Consortium of the Armed Forces Institute
of Regenerative medicine for your consideration.

 

Please note
that the information from LWI contained in this proposal is confidential in nature and describes proprietary facilities, processes
and testing. Please treat our confidential information appropriate.

 

LWI appreciates
the opportunity Dr. Kohn provided to us by allowing us to participate in this proposal. We have greatly appreciated the support
and guidance provided by the RCCC-AFIRM team durning development of this proposeal. Should the proposeal receive funding, LWI
looks forward to working with RCCC-AFIRM to carry out the clinical trial of LWI’s Engineering Skin Substitute in the near
future.

 

Please do
not hesitate to contact LWI should you have any questions about our proposal of need additional information.

 

Sincerely,

 

	/s/
    Shawn Cavanagh	/s/
    Kim Warren
	Shawn
    Cavanagh	Kim
    Warren
	President
    and Head,	Lonza
    Co-Prinicpal Investigator
	Lonza
    Bio Science	Head
    of Cell Therapy Development
		Lonza
    Walkersville, Inc.

    	18

    	 

    

 

	
    

 	Rutgers
                                                                                                           - Cleveland Clinic

        Consortium

	Proposal

        Clinical
        Trial Supplemental Funding

        Due:
        March 3, 2009

 

Project:
Expedited availability of autologous engineered human skin for treatment of burned soldiers

 

	Period:	1
    July 2009 – 30 Jun 2011 
	Funds
    requested:	$1,500,000
	Institution:	 Lonza
    Walkersville, Inc. (LWI)
	Co-PIs:	For
    LWI as study sponsor:	Kim
    Warren, PhD
		For
    AFIRM as compliance officer:	Stanton
    Gerson, MD
		For
    the clinical performance sites:  	Steven
    Wolf, MD
	Academic
    partners:	For
    technical consultation:	Steven
    Boyce, PhD
	Industry
    partners:	Lonza
    Walkersville, Inc. (LWI)	
		For
    regulatory consultation 	Howard
    Schrayer

 

		Pages
	Proposal
    Main Body	
	Overview
    and Background	2-3
	Benefits
    to the Patient	4
	Impact	4
	Preliminary
    Data	5-14
	Proposed
    Research and Methods	15-17
	Clinical
    Trial	17-21
	Supporting
    documentation	
	Abbreviations	22
	References	23-24
	Biographical
    Sketches: (4 page limit per individual)	25-47
	Facilities
    & Equipment description	48-50
	List
    of relevant patents	51
	Intellectual
    and Material Property Plan	51
	Cost
    estimate form	Attached
	Budget
    justification	52-54

    	19

    	 

    

Project
Title:

 

Expedited
Availability of Autologous Engineered Skin Substitutes for Treatment of Burned Soldiers 

 

1.1
Overview 

 

This
proposed study involves the production of a novel and superior engineered skin substitute for the treatment of patients suffering
from extensive, deep burns. The autologous engineered skin offers reductions in morbidity and mortality after life-threatening
burns by decreasing dramatically the need for skin grafts to complete wound closure. Secondary benefits of the engineered skin
may include, but not be limited to: fewer surgical procedures for skin grafting, improved cosmetic outcomes, and shorter hospital
length of stay. To date, these projected advantages have been demonstrated in a clinical trial involving over 50 pediatric patients

1-3.
Specifically, the funding being requested for this phase of the program will support the following deliverables:

 

	Implementation
of cGMP manufacturing for the Engineered Skin Substitute “ESS” (trade name, PermaDerm) by Lonza Walkersville, Inc.
(LWI) which holds licenses to patents for the platform technologies. LWI has proven capabilities for manufacture and delivery
of cell therapies with operational systems for full validation of product purity and safety. (See section 4.3)

 

	Preparation
and submission of an Investigational Device Exemption (IDE) application to the US Food and Drug Administration (FDA) to perform
a limited study with ESS in patients with full-thickness burns involving greater that 50% of the Total Body Surface Area (TBSA).
(See section 5)

 

	Performance
of an initial clinical trial in 8-10 subjects to demonstrate safety and to prove the principle for reduced morbidity with ESS
in comparison to meshed, split-thickness skin grafts. Successful completion of this study is expected to enable performance of
a pivotal trial and lead to FDA approval of this advanced therapy. (See section 6)

 

1.2
Clinical Setting and Unmet Needs. Medical needs. Mortality and morbidity from burns, trauma, and other skin loss
injuries remain significant medical and socio-economic problems estimated to cost more than $1 billion annually in treatment costs
and lost productivity 4,5. Burns in the civilian population cause more than 900,000 hospital days in the US annually 6,7, and
full-thickness burns require treatment by excisional debridement and split-thickness skin grafting. From 2003-2007, the burn unit
at Fort Sam Houston (USAISR) had 1497 hospitalizations, including 656 military, of which 540 were related to the conflict in Iraq
8. However, victims of large burns do not have sufficient donor skin to complete grafting without multiple reharvestings of donor
sites at 7-10 day intervals. With each harvest, healing time increases as epithelial sources (glands, follicles) are removed,
leaving wounds and donor sites susceptible to microbial contamination. Sepsis, which develops in part from microbial contamination
and invasion in wounds, accounts for 75% of deaths from burn injuries9, and is often associated with multiple organ failure10.
Other major aspects of recovery from burns, including immune function, positive nitrogen balance 11,12 and physical therapy, all
depend on completion of wound closure. A significant source of long-term morbidity is development of scar at both the donor sites
of skin grafts, and in wounds grafted with meshed and widely-expanded skin grafts. Conversely, it is well-known that grafting
of wounds with sheet grafts suppresses scar formation.

 

1.3
Technology Overview. Autologous Engineered Skin Substitutes (ESS). Over more than 20 years, preclinical and clinical
studies have resulted in development of autologous ESS. Classified as a medical devices, ESS currently consists of a lyophilized
sponge of collagen and chondroitin-sulfate, populated with cultured dermal fibroblasts and epidermal keratinocytes which organize
into an analog of skin tissue (Figure 1). The device develops epidermal barrier and basement membrane 13, and releases high levels
of angiogenic growth factors, including but not limited to, Vascular Endothelial Growth Factor (VEGF), basic Fibroblast Growth
Factor (bFGF), and Transforming Growth Factor-beta 1 (TGF-β1) 14-16. In addition, both eratinocytes and fibroblasts in culture
are known to release inflammatory mediators which promote transient development of fibro-vascular tissue 17.

    	20

    	 

    

 

 

Figure
1. Histology of A) native human skin (NHS), and C) engineered skin substitute (ESS). The epidermal anatomy of
ESS resembles closely that of NHS with proliferating keratinocytes of the epidermal component (e) attached to the dermal component
(d), nucleated suprabasal cells analogous to the spinous layer in NHS, and a keratinized surface layer that resembles the protective
stratum corneum. Adhesion of the epidermis results from development of basement membrane proteins, B) collagen IV and D)
laminin 5; E) BrdU-positive nuclei; F) Integrin β4. Scale bar = 0.1 mm.

1.4
Technology transfer and commercial development of ESS. Platform technologies for ESS were originated by Steven Boyce,
PhD, at the University of Cincinnati and the Shriners Hospitals for Children between 1989-2009, and at the University of California
San Diego between 1985-1988. These technologies are covered by five US patents 18-22, and two European patents 23,24 (see section
11). Based on clinical successes with these technologies, they were licensed to Cutanogen Corporation which was founded by Dr.
Boyce. A business plan was developed which included alternative pathways to product manufacturing and marketing through the Investigational
Device Exemption (IDE)/Pre-Market Approval (PMA), and/or Humanitarian Device Exemption (HDE) mechanisms of regulatory clearance
by FDA. In 2006, Cutanogen Corporation was acquired by Cambrex BioScience Walkersville, Inc (CBSW). In 2007, CBSW and Cutanogen
were acquired by Lonza Corporation which is a global biopharma company based in Basel, Switzerland, and which reported 2008 revenues
of CHF 2.94 billion 25. Subsequently, CBSW changed its name to Lonza Walkersville, Inc. (LWI), but continued operations from its
facilities in Walkersville, Maryland. LWI has made a corporate commitment to the field of cell therapy, and has comprehensive
facilities for manufacture of cellular therapeutics in full compliance with regulatory standards for current Good Manufacturing
Practices (cGMP; see details in section 4.3). LWI has proceeded with technology transfer for ESS, and has completed multiple engineering
runs to manufacture PermaDerm branded ESS. With capabilities in formulation of pharmaceutical-grade nutrient media, tissue acquisition,
cell and tissue culture, and cell banking, LWI has an established record as a leader in development and delivery of tissue engineered
medical products for regenerative medicine.

 

In
this context, ESS remain the most advanced autologous skin grafts that have been tested in extensive clinical trials. As described
above, the dermal component promotes development of epidermal barrier, basement membrane, and release of angiogenic factors to
stimulate rapid vascularization. ESS can be handled easily, and forms functional skin tissue within two weeks after transplantation
allowing early rehabilitation. By four weeks after grafting, pressure garments can be worn without mechanical loss of healed skin.
The primary benefits which have been demonstrated in burns involving greater than 50% of the total body surface area (TBSA) are:
a) reduction of requirements for harvesting of donor skin to complete closure 1,26; and, b) lower mortality27. Secondary benefits
may include fewer surgical procedures for grafting, earlier wound closure, shorter length of hospitalization, and reduced morbidity
from scar. A more complete summary of clinical results is shown below in Preliminary Data.

    	21

    	 

    

 

2. Benefits
to the patient:

 

Clinical
Need: Prompt and effective wound closure remains a rate-limiting factor in recovery from extensive, deep burn injuries. To
address this limitation, autologous engineered skin substitutes (ESS) have been developed and clinically tested as an adjunctive
treatment to conventional skin grafting. Completed clinical studies show a reduction in the requirement for harvesting donor skin
to complete wound closure. Technology for ESS has been licensed to Lonza Walkersville, Inc. which has completed technology transfer
and product development. ESS may allow reductions in morbidity and mortality for soldiers who are casualties of combat-related
burn injuries. Stated simply, autologous ESS offer a life-saving alternative therapy to patients with catastrophic burn injuries.

 

This
proposal complements the funded AFIRM project for ESS by expediting the path to clinical treatment of wounded soldiers. This supplement
provides precisely the resources needed to facilitate and expedite the availability of ESS for clinical study and treatment of
extensive burns in military populations. The requested funding will also serve to establish a platform of clinical studies at
the USAISR or other clinical centers to which advanced models of ESS with pigment or vascular networks may proceed more rapidly.
Performance of the clinical studies will be sponsored by the Lonza Walkersville, Inc., with full regulatory support from the Clinical
Trials Core facility of the RCCC-AFIRM directed by Stanton Gerson, MD, at the Case Western Reserve University.

 

3. Impacts:

 

Availability
of autologous ESS will reduce morbidity from harvesting of donor skin autografts, and reduce mortality as previously demonstrated
in pediatric populations with burns of greater than 50% TBSA 1,26,27. The enrollment criterion of 50% TBSA burns relates to the
amount of available donor skin, and 4-week time period required to fabricate the study device. Patients with burns smaller than
50% TBSA can be treated by conventional grafting in about 4 weeks. For massive burns (>50% TBSA), increased availability of
engineered skin is also expected to reduce total numbers of surgical procedures for skin grafting, total length of hospital stay
intensive care days, total blood loss and requirements for transfusion, and to improve functional outcome and quality of life
after discharge from the hospital. However, the full impact of this therapy has been reduced by the limited quantity of devices
which can be generated in Dr. Boyce’s research laboratory (i.e., ~900 cm2 or ~1 ft2 each week). Based on an approximate
TBSA of an adult male of 2.0 m2, and a demonstrated ability to expand donor skin by 100 times its original area, about 0.02 m2
(200 cm2), or 1% TBSA of uninjured skin is needed to resurface the entire body. This principle for conservation of donor skin
will be proven in the proposed study, but on a reduced scale to meet the requirements of statistical power analysis (see section
6.5) and the available budget. An average dosage of study devices will be 0.4m2 (4,000 cm2) generated from a skin biopsy of 40
cm2. This dosage in an adult male represents ~20% of the TBSA. Table 1 shows an example for an adult with a full-thickness burn
of 80% TBSA. This example assumes expansion of AG by 1:4, and ESS by 1:100.

 

Table
1. Theoretical (white middle row) and proposed (shaded bottom row) impacts (shaded columns) of ESS compared to split-thickness
skin autograft (AG) for a full-thickness burn of 80% TBSA

 

	A	B	A*B	C	A*C	A*C*0.25	D	A*D	A*D0.01
	TSBA
    (cm2)	Burn
    % TSBA	Burn
    (cm2)	AG
    TSBA	AG(cm2)	AG
    Donor Area (cm2)	ESS
    TSBA	ESS
    (cm2)	ESS
    Donor Area (cm2)
	20,000	80%	16,000	20%	4,000	1,000	60%	12,000	120
	20,000	80%	16,000	60%	12,000	3,000	20%	4,000	40

 

The
budget of this proposal will provide 40,000 cm2 of ESS for a clinical trial in 8-10 subjects. Therefore, the dose of ESS for each
subject will average 4,000 cm2 (4.4 ft2) and be generated from a skin biopsy of an average area of 40 cm2 (0.044 ft2). This design
will prove the principle of the primary end point which is reduction of donor skin harvested for wound closure. The full clinical
impacts of the ESS technology will require larger doses of ESS per patient which will require commercial scale-up after successful
completion of this study. After scale-up, 1 m2 of ESS could be delivered in 4-6 weeks.

    	22

    	 

    

 

4. Preliminary
Data: 

 

4.1
Preclinical studies. Characterizations of ESS in vitro have included anatomic and physiologic comparisons with natural
human skin, incorporation of melanocytes to generate pigmentation (Figure 2), addition of microvascular endothelial cells to promote
organization of a vascular plexus 28, and grafting to athymic mice to assess changes in these properties, and stability of healed
skin over extended periods of time 13,29. Genetically-modified ESS have also been reported by Dorothy Supp, Ph.D., for expression
of PDGF, VEGF, beta-defensins, both in vitro and in after grafting to athymic mice 30,31. This model has also been used to study
electro-spun biopolymer scaffolds and stem cell populations. The model is also readily adaptable for studies of regeneration of
nerve and epidermal adnexi (glands and hair).

 

 

 

Figure
2. Density-dependent pigmentation of ESS at 5 weeks after grafting to athymic mice. Upper left) 0 HM added, and no
pigment develops. Upper right) 400 HM added to a 4 cm2 ESS graft (1X102 HM/cm2) develop infrequent (<40) foci of pigment.
Lower right) HM added at 1X103 HM/cm2 develop partial (~50% area) pigmentation. Lower left) Addition of 1X104 HM/cm2
generates complete pigmentation in 5 weeks.

 

4.2
Clinical studies of ESS in burns. Boyce et al. 2006. J Trauma Crit Care 60(4):821-829. Engineered skin substitutes
(ESS) were evaluated in 40 patients under IDE G980023 between 1998 and 2003. From 2003-2005, an additional 14 patients were evaluated
for a total of 54.2 Although ESS remain investigational, they have become part of the local treatment protocol for patients suffering
from burns of greater than 50% of the total body surface area (“TBSA”; Fig 3). Data on the following pages describe
the impacts of ESS on quantitative coverage of burns, and on qualitative assessment of scar. ESS protocols now conform to clinical
schedules for grafting in a two-stage procedure, irrigation with antimicrobials for 5 days, and initiation of rehabilitation at
7-10 days after grafting. The primary benefits to patient recovery are reduction of requirements for donor skin harvesting, and
reduction in the mesh ratio for split-thickness skin grafts. These benefits result in fewer donor sites, less pain and reduced
scar at both the harvest site and the graft site.

Patients
and their families affirm these benefits. Percentages of treated areas closed at post-operative day POD 14, and the ratio of closed
to donor areas at POD 28 (54 patients) are shown in Figure 4. Engraftment at POD 14 was 79.5 ± 2.1% for ESS and 95.7 ±
2.0% for skin autograft AG, (Fig 4A). Wounds closed with ESS covered 61.5 ± 8.4 times the area of the donor biopsy (Fig
4B) compared to 4:1 expansion of meshed autograft. These values were different statistically (p=0.006) by one-sample t-test, and
demonstrate the reduction of donor skin harvesting by grafting of ESS in place of AG. This result defines a new medical benefit
to burn patients by autologous ESS. These data demonstrate that comparable rates of engraftment for ESS and AG, and that 1% TBSA
of donor skin can close ~60% TBSA of excised burn. Vancouver scores for ESS were statistically lower (p<0.05) than AG during
the first six months after grafting, and not different at six months or after (Fig 4C).

    	23

    	 

    

 

Figure
3. Clinical photos after grafting of engineered skin substitutes (ESS) and meshed, split-thickness skin autograft (AG) to
the torso of a patient with 77% TBSA burns. A,B) ESS applied in the operating room; C) Post-operative day (POD)
14, wounds closed & rehab begins; D) POD 69, stable wound closure, no blisters, no regrafting, E) POD 479, pliable,
hypopigmented skin. Scales in centimeters.

 

Figure
4. Quantitative outcomes of ESS and AG in treatment of pediatric burns (n = 54). A) % of treated area closed shows ~80% engraftment
of ESS; B) Closed: donor ratio; C) Vancouver scores for ESS were as good or better than AG during the first year after grafting.
(*, p<0.05) Importantly, the closed: donor ratio of ~60 (B) demonstrates a significant reduction in donor skin harvesting for
patients treated with ESS, and defines a new medical benefit for these patients.

 

Two
recent cases of pediatric burns of greater than 90% TBSA were treated successfully with auto-ESS. ESS were prepared from split-thickness
skin biopsies collected after enrollment of the burn patients by Informed Consent into a study protocol approved by the local
Institutional Review Board. Subject #130 was a 10 year-old male who sustained 94% TBSA burns, and Subject #131 was a 2 year-old
female who sustained 90% TBSA burns. The injuries were all full-thickness, and occurred in separate building fires in 2007. ESS
were prepared from autologous keratinocytes and fibroblasts which were isolated from split-thickness skin, cultured, and cryopreserved
for later use. Cells were combined with collagen-based sponges, and incubated at the air-liquid interface to promote formation
of epidermal barrier. ESS and split-thickness skin autograft (AG) were applied in a matched-pair design with each patient serving
as their own control. The first application of ESS was compared to AG for all end points, and subsequent applications of ESS were
added to the first and quantify device efficacy. Data collection consisted of photographs, area measurements of donor skin and
healed wounds at post operative days (POD) 14 and 28 after grafting, and healed tissue biopsies as available. Data are expressed
below as mean values for these two subjects for: A) % area closed at post-operative day (POD) 14, B) %TBSA closed at POD 28, and
C) ratio of closed to donor areas at POD 28. Due to the small sample size, mean values were calculated, but no statistical analyses
were performed.

    	24

    	 

    

 

Figure
5. Comparative grafting of engineered skin substitutes (ESS) and meshed, split-thickness skin autograft (AG). Left)
ESS is applied readily with forceps and adheres rapidly to wounds. Right panel) Comparative grafting of ESS and AG on the
anterior torso of subject #130. Scale in centimeters.

 

Prior
to treatment with ESS, wounds were excised, and grafted with either meshed, allograft skin or Integra Dermal Regeneration Template.
Two-stage grafting was performed in which the allograft or silicone layer of Integra was removed, and wounds were treated overnight
at two-hour intervals with alternating irrigations of 5% Sulfamylon solution and double antibiotic solution (200 U/mL polymyxin
B and 40 μg/mL neomycin) 32. The following morning, the dressings were removed in the operating room, hemostasis was obtained
with electrocautery and compression. Autograft skin was harvested at a thickness of 0.010-0.012 inches thickness, and meshed and
expanded 1:2. ESS were applied with a dressing of N-Terface, and AG was applied directly to the prepared wounds. Grafts were stapled
to the wounds, dressed with fine-meshed gauze and bulky gauze with perforated red rubber catheters and secured either with a Spandex
stent or with elastic wrap bandages. Sites were irrigated for five days with a formulation of non-cytotoxic antimicrobial agents
1 at a dosage of 1mL/cm2 three times per day. Dressings were changed on POD 2. On POD 5, wet dressings were discontinued, and
all dressings and staples were removed. Open areas of ESS were dressed with a topical ointment consisting of equal parts Neosporin,
Bactroban and Nystatin on Adaptic. Open areas of AG were dressed with a topical cream consisting of equal parts Silver sulfadiazine,
Bacitracin and Nystatin on Adaptic. Keratinized areas of ESS were treated with moisturizing lotion (i.e., Curel) beginning at
POD 11, and moisturizing cream (i.e., Eucerin) was applied to AG beginning at POD 7. Both graft types were treated according to
the AG protocol beginning at POD 15. Results: Subject #130 received 12 applications of ESS over 4 months, and Subject #131 received
7 applications of ESS over 3 months. Average % engraftment (dry epithelium) at POD 14 was 72.4% for ESS and 96.9% for AG. Partial
regrafting was performed in 8 of 12 ESS sites (66%) for Subject #130, and 4 of 7 ESS sites (57%) for Subject #131. The average
ratio of closed wound area to donor skin area at POD 28 was 125.5 for ESS, compared to 4.0 for AG. Average %TBSA closed at POD
28 was 51.4% for ESS, and 40.6% for AG. Physical therapy was resumed beginning at POD 7, and ESS which was healed at POD 28 did
not blister or ulcerate subsequently. Patients wore pressure garments over all treated areas. Pigmentation of areas treated with
ESS was deficient, but pliability of healed skin was acceptable. Figure 6 shows images of Patient A at the time of hospital discharge,
187 days after the first treatment with autologous engineered skin.

    	25

    	 

    

 

Conclusions:
These results illustrate that ESS offers the potential to reduce requirements for donor skin harvesting for grafting of excised,
full-thickness burns involving most of the TBSA. Survival of these two patients after treatment with ESS is consistent with previous
findings that autologous engineered skin is associated with reduced harvesting of donor skin autograft 1, and decreased mortality
in matched patient populations 27. Availability of ESS for treatment of extensive, deep burns may reduce time to wound closure,
morbidity and mortality in this pediatric patient population.

  

Figure
6. Subject #130, a 94% TBSA burn with healed ESS and AG at POD 187. Top panels) Torso and arms. Bottom panels) Legs. Wounds close
rapidly because of epidermal keratinization in vitro, and do not blister because of basement membrane formation. igmentation of
most areas treated with ESS was deficient, but pliability of healed skin was acceptable. The patient wore pressure garments over
all treated areas. Application as non-expanded sheets reduces granulation and scar to generate a relatively smooth surface. Scale
in cm. 

 

Figure
7. Photos of subject #131 at post-burn day 370 after grafting of engineered skin substitutes (ESS) and meshed, split-thickness
skin autograft (AG) for treatment of 90% TBSA burns. Left panels, anterior) ESS provides stable wound closure and generates skin
which is smooth, soft and strong. Right panels, posterior) Pliability of healed skin allows free ambulation. Scales in centimeters.

    	26

    	 

    

 

 

 

Figure
8. Quantitative outcomes of ESS and AG in treatment of two pediatric patients with ≥90% TBSA burns. A) % of treated
area closed at POD 14 was 72.4% for ESS and 96.7% for AG; B) % TBSA closed at POD 28 was 51.4% for ESS and 40.6% for AG;
and, C) Closed:donor ratio at POD 28 was 125.5 for ESS compared to 4 for AG. Importantly, the closed:donor ratio of ~125
(C) demonstrates a significant reduction in donor skin harvesting for patients treated with ESS, and defines a new medical benefit
for these patients.

 

Taken
together these studies provide a solid foundation for prospective studies with ESS in adults, and for increased availability through
fabrication by a commercial manufacturer. The requested funding is anticipated to expedite the availability of ESS to wounded
soldiers, to reduce their suffering during hospitalization, decrease morbidity and to improve their long-term quality of life.

 

4.3 ESS
process 

 

The
technology transfer of the ESS manufacturing process took place in 2006 and included activities such as set-up of all project-specific
parts, technician training on cell isolation, cell expansion and inoculation, lab set-up, and acquisition of all necessary equipment.
Technical transfer and training also included release assays and in process testing procedures, including histology and surface
hydration testing.

 

4.3.1
Current manufacturing process

 

Lonza’s
Cell Therapy Process Development staff has made significant improvements to the process since its acquisition. Lonza has qualified
new raw material suppliers and improved formulations, including changes to the media, antibiotics, and a decrease in growth factors
used in the process. Lonza also made changes to cell culture vessels and purchased a custom-made material for ESS lifting. The
current process begins with an isolation of keratinocytes and fibroblasts from a donor biopsy. Each cell type is expanded separately
until 75-95% confluent (6 to 8 days). This stage of culture is referred to as Passage 1 (P1). At this point, a portion of the
cells are expanded through P2 and P3, with a passage occurring every 6 to 8 days. The remaining portion of the cells is cryopreserved
for a second round of expansion and ESS production. Each patient receives two ESS grafts approximately two weeks apart. When the
expanded cells reach confluence in the P3 stage, they are harvested and inoculated onto pre-hydrated collagen biopolymers. On
the first day of inoculation, fibroblasts are harvested, concentrated, and seeded onto biopolymers in a dropwise fashion at a
specified concentration. The fibroblasts absorb onto and migrate through to the lower surface of the biopolymer over the next
24 hours. The next day, keratinocytes are harvested, concentrated, and put onto the same biopolymers in a dropwise fashion. The
keratinocytes continue to grow on the upper surface of the ESS. Inoculated grafts sit on sterile lifting frames so that they receive
the correct amount of moisture on the lower surface (fibroblast surface) and little to no moisture on the upper surface (keratinocyte
inoculated surface). The biopolymer is a collagen-glycosaminoglycan (CAG) substrate produced by lyophilization of the collagen-GAG
slurry, followed by dehydrothermal treatment and terminal sterilization by gamma irradiation. It has been and will continue to
be produced by Lyophilization Services of New England (a FDA registered cGMP manufacturer with expertise in collagen substrate
production), or a comparable supplier. An outline of the process is in Figure 9.

    	27

    	 

    

 

Figure 9.

Process
Flow

 

    	28

    	 

    

 

4.3.2
Development of Manufacturing Batch Records (MBR) for cGMP manufacture.

 

Beginning
in 2006, Lonza developed a comprehensive set of standard operating procedures for manufacturing for ESS. These procedures are
referred to as Manufacturing Batch Records on which each procedural step is specified and verified for each manufacturing run.
Examples of MBRs include, but are not limited to:

 

	4.3.2.1	Skin
    biopsy collection and shipping
	4.3.2.2	Cell
    isolation and primary culture of fibroblasts and keratinocytes
	4.3.2.3	Harvesting
    of cultured cells for:
			Serial
    passage
			Cryopreservation
    in liquid nitrogen
	4.3.2.4	Recovery
    from cryopreservation and subculture
	4.3.2.5	Expansion
    of cell populations
	4.3.2.6	Inoculation
    of cells onto biopolymer sponges
	4.3.2.7	Incubation
    at the air-medium interface
	4.3.2.8	Quality
    Assurance testing by histology and epidermal surface hydration
	4.3.2.9	Sterility
    testing for product release

 

These
MBR procedures have been organized into a process flow diagram which is shown on the following page (Figure 9). This process has
been used repeatedly in development and engineering runs at Lonza to reproduce the ESS technology, and to upgrade the procedures
and reagents used previously to meet standards for current Good Manufacturing Practices. This process and these procedures will
be combined with documentation for facilities validation and reagent certifications to submit to FDA for clearance to manufacture
ESS for the proposed clinical trial.

 

4.3.3
Development Runs at Lonza

 

The
ESS project at Lonza has included research and development for process improvements. Currently Lonza has performed 6 development
experiments, 9 full engineering runs, and 22 partial engineering runs. Developmental research at Lonza has been focused on the
reduction of animal origin materials, media optimization, improved cell yield from isolation, reduction of growth factors, and
comparable or improved growth of keratinocytes and fibroblasts before and after inoculation of ESS. Engineering runs and experiments
varied in size and remained small for training purposes. Expected yields can be based on the following results:

 

	Development
                                       Run Example A

        Biopsy
        size= 30 cm2

        Number
        of days in culture: P1= 6 P2= 5 P3= 5 on ESS= 13

        Total
        Number of days before release= 30

        Total
        ESS made from 2E6 fibroblasts and 4E6 keratinocytes= 8

        Potential
        total amount of ESS produced per lot= 2385 cm2

        Total
        skin expansion = ESS area / biopsy area = 2385 / 30 = 80 fold 

	Development
                                       Run Example B

        Biopsy
        size= 42 cm2

        Number
        of days in culture: P1= 7 P2= 6 P3= 6 on ESS= 14

        Total
        Number of days before release= 33

        Total
        ESS made from 2E6 fibroblasts and 4E6 keratinocytes= 4

        Potential
        total amount of ESS produced per lot= 4706 cm2

        Total
        skin expansion = ESS area / biopsy area = 4706 / 30 = 157 fold

    	29

    	 

    

 

	Estimated
                                       Model for Clinical production lots 

        Biopsy
        size= 30 cm2

        Number
        of days in culture: P1= 6 P2= 6 P3= 6 on ESS= 13

        Total
        Number of days before release= 31

        Total
        ESS made from 2E6 fibroblasts and 4E6 keratinocytes= 20

        Potential
        total amount of ESS produced per lot= 3600 cm2

        Total
        skin expansion = ESS area / biopsy area = 3600 / 30 = 120 fold

 

 

	Figure
        10. ESS produced at Lonza Walkersville, Inc.Left, lower) A custom-designed culture dish for incubation of ESS at the air-liquid
        interface to promote formation of epidermal barrier. This dish will allow a larger format of ESS which will reduce linear scars
        between grafts, and simplify surgical application. Dish width = 24 cm. Left, upper) Individual ESS device with corners removed
        for histology. Dish diameter = 15 cm. Right) Multiple devices are exposed to the atmosphere to measure surface hydration. Dish
        diameter = 15 cm.

4.3.4
Production Plan

 

Lonza
plans to carry out additional development runs including final engineering runs. Lonza will then be prepared for the isolation
and expansion of a 30-40 cm2 biopsy per patient over a 4-6 week time period into multiple ESS grafts. Two production runs of ESS
grafts will result in a final total area of 3,600 to 4,200 cm2 for each patient. The ESS grafts will be applied in two separate
procedures approximately two weeks apart. The second cell expansion will be performed using the cryopreserved P1 cells (as referenced
in section 4.3.1).

 

4.3.5
Status of GMP process and compliance

 

Lonza
has developed this product and manufactured ESS grafts that are acceptable according to histology testing, surface hydration testing,
visual inspection and safety testing procedures. Product made at LWI has not yet been used in a clinical trial or transplanted
to patients. All MBRs exist in draft form and will be finalized and entered into Lonza’s document control system before
being used in clinical production. Other key steps to compliance and certification of the product will include in-house tech transfer
of the remaining release tests to the Cell Therapy QC group. Once documentation and training are complete, Lonza production staff
will perform 2-3 Engineering Runs. The entire process to initiation of GMP manufacturing will take about 12-16 weeks.

    	30

    	 

    

 

4.3.6
Quality 

 

The
LWI Quality Department is composed of Quality Assurance, Regulatory Affairs, Document Control, Label Control, Inspection, Validation,
and Quality Control. This department operates independently from management and production. Responsibilities include in-process
monitoring and the establishment of standards for personnel, facilities, procedures, equipment, testing, and record keeping. Lonza
Walkersville Inc. maintains dedicated Quality Assurance and Quality Control staff to monitor all processes.

 

The
Quality Assurance group supports the manufacture and release of product from Cell Therapy. The Quality Control laboratories are
divided into Cell Biology, Microbiology and Molecular Biology and staffed by a group of over 65 individuals. All activities are
coordinated by a centralized receiving and logging process to assure cGMP compliance. An additional testing lab is available within
the designated manufacturing area to provide additional in-process support.

 

4.4
ESS product testing rationale and product tests. The in-process and final release testing for ESS is described below

 

4.4.1
Bioburden

 

Bioburben
testing is performed on the biopsy transport medium using a protocol in accordance with USP<61> Microbial Test Limits. Identification
of microbial agents detected will be reported as “For Information Only” (FIO).

 

4.4.2
Sterility

 

Grafts
are tested for sterility during maturation (6-7 days prior to product release) and at final release. Samples are generated by
pooling of 1 ml spent medium from 100% of the grafts followed by testing in accordance with USP<71> Sterility using the
membrane filtration method. An additional 1 ml sample is retained for retesting if necessary.

 

4.4.3
Surface Electrical Capacitance (SEC)

 

SEC
is measured with a Nova Dermal Phase Meter (DPM 9003) as a quantitative surrogate index of epidermal barrier formation in the
ESS. Four locations are tested on every graft on days 6 or 7 and a second test on days 8 or 9 of incubation. The data are averaged
and demonstration of a time-dependent SEC decrease yields a passing graft.

 

4.4.4
Histology

 

Evidence
of a stratified epidermal substitute attached to a dermal substitute populated with fibroblasts indicates ESS acceptable for grafting.
To minimize graft handling, 10% of grafts will be tested in a non-destructive manner (as can be seen in Figure 10).

 

4.5
ESS Summary

 

The
product is an engineered skin substitute (ESS) consisting of autologous skin cells within a degradable biopolymer substrate. Isolated
epidermal keratinocytes and dermal fibroblasts are cultured in nutrient media to promote population expansion. The cells are separately
seeded onto a biopolymer substrate fabricated from collagen and carbohydrate polymers (glycosaminoglycan). The ESS device has
been shown in preclinical studies to generate a functional skin barrier and in clinical studies to promote closure and healing
of burns. This is the only medical device known at present for the treatment of full-thickness burns with autologous cells combined
with a polymeric substrate.

 

With
extensive cell therapy expertise and manufacturing capabilities, Lonza is well positioned to produce ESS at the Walkersville,
MD facility. Based on yields generated during engineering runs and development runs, it is projected that cells isolated from
a 30-40 cm2 biopsy, would generate an approximate yield of 3600 cm2 per lot of ESS material. Production of ESS would be staggered
using two lots to produce enough product per patient in 6-8 weeks.

    	31

    	 

    

 

5.
Proposed Research and Methods:

 

5.1
Specific Aims. The main objective of the work that will be supported by this supplemental funding is to expedite availability
of ESS by performance of a limited study (8-10 subjects) under an Investigational Device Exemption (IDE) protocol, with ESS generated
by the commercial manufacturer, Lonza Walkersville, Inc (LWI). ESS remains an investigative device which has been studied previously
as described above. Toward these objectives, two specific aims are proposed:

 

5.1.1
Planning for delivery of ESS (trade named, PermaDerm) to a qualified burn center from Lonza Walkersville, Inc. for
application to burn patients under an IDE protocol. Availability requires: a) verification of device manufacture under standards
for current Good Manufacturing Practices (cGMP); b) demonstration of quality assurance criteria for product release; c) development
of packaging materials and shipping protocols; d) development, validation and FDA acceptance of a clinical trial protocol; e)
compliance systems through the AFIRM Clinical Trials Office at Case Western Reserve University; and, f) permission from FDA to
proceed with the clinical study.

 

5.1.2
Comparison of ESS and meshed, split-thickness autograft in a controlled, prospective study. The proposed study will
follow an open-label, randomized, matched-pair, internally-controlled design similar to previous studies, but in adult burn patients.
The hypothesis of the study is that ESS provides a quantitative reduction in donor skin required to complete wound closure, and
scar which is not statistically different from, or better than meshed and expanded split-thickness skin autograft. End points
for the study are described below in section 6.

 

5.2
Research Plan.

 

5.2.1
Diagram of the research plan.

 

 

 

Figure
11. Diagram of the research plan. Lonza Walkersville, Inc. (LWI) is the applicant and study sponsor. The study design
(top) will be submitted to the AFIRM Clinical Trials Core (“CTC”; Dr. Gerson) for review, and addition of compliance
procedures (e.g., DSMP, DSMB). The AFIRM-CTC will advise a clinical research organization (CRO) which will assemble the Sponsor’s
and Investigator’s Brochures, Case Report Forms, and the study notebook for each subject. LWI will submit the IDE protocol
to FDA. After FDA acceptance, the CRO will work directly with the clinical performance sites to submit protocols to the local
Institutional Review Boards, and then to the Human Subjects Research Review Board (HSRRB) at USAMRMC at Ft. Detrick. After all
permissions are obtained, the CRO will serve as the sponsor’s agent to monitor enrollment and treatment of subjects, data
safety and study reporting. Manufacturing protocols (bottom) will follow established procedures at Lonza for regulatory acceptance.

    	32

    	 

    

 

5.2.2
Device manufacture under cGMP processes. LWI will confirm completion of Standard Operating Procedures (SOPs) for manufacture
of ESS under conditions which comply with standards for current Good Manufacturing Practices (cGMP). The batch size (e.g., 2,000
cm2) will determine the specific cGMP suite which LWI will assign for this project. After assignment, the suite will be equipped,
staffed, and validated for manufacturing. This step in the project is expected to require about 3 months.

 

5.2.3
Validation of quality assurance (QA) criteria for product release. Quality assurance criteria for product release will
include both general safety criteria for medical devices (sterility, mycoplasma, endotoxin), and specific criteria for product
potency (epidermal barrier, cellular organization, device thickness) which constitute criteria for product release. The general
criteria are routine practices at LWI, and will be included in the facility activation. The specific criteria have been included
in engineering runs at LWI, and SOPs for those assessments have been developed.

 

5.2.4
Validation of clinical study design through the RCCC-AFIRM Clinical Trials Office. The study design will be adapted
from previous studies with engineered skin substitutes (see section 6). That design will be submitted for review to the RCCC-AFIRM
Clinical Trials Core under the direction of Stanton Gerson, MD in the Center for Stem Cell and Regenerative Medicine at the Case
Western Reserve University. The AFIRM-CTC will format the documents, review the safety and efficacy end points of the study, and
consider any revisions which may be needed to the statistical analyses of the data. The AFIRM-CTC will assure compliance of the
study with standards for current Good Clinical Practices (cGCPs).

 

5.2.5
Engagement of a Clinical Research Organization (CRO) for daily management of the clinical trial. A CRO with experience
in medical device evaluation will be selected and retained to serve as the sponsor’s agent and manager of the clinical trial.
The CRO will have responsibilities to assemble and finalize the study documents, including but not limited to: a) clinical trial
protocol; b) the Investigator’s Brochure; c) clinical monitoring plan; and, d) approvals from the Institutional Review Boards
(IRBs) of performance sites, and the Human Subjects Research Review Board of the DoD.

 

5.2.6
Regulatory protocol development and submission. LWI will be responsible for device manufacturing, process validation,
regulatory submissions, and clinical performance at one or more qualified burn center(s). Lonza has initiated technology transfer
for manufacture of the ESS device (trade named PermaDermTM) under cGMP (i.e., clean room) conditions. Devices produced by
Lonza have not yet been compared directly to devices fabricated in the Dr. Boyce’s research laboratories in Cincinnati,
OH. Comparability testing will be performed as required by FDA with support from Lonza as a contribution in kind to the project.

 

5.2.7
Commitment of sites for clinical performance of the study. Because the AFIRM program is directed toward new therapies
for wounded warfighter, the first choice for a clinical study site for burn repair is the Burn Unit of the US Army Institute for
Surgical Research (ISR) at the Brooke Army Medical Center of Fort Sam Houston in San Antonio, Texas. In conference with Steven
Wolf, MD, director of clinical investigations at the ISR, some, but perhaps not all, of 8-10 subjects for this proposed study
may be available for accrual within the planned study enrollment period of one year. Drs. Wolf and Blackbourne have committed
for the ISR to participate in this study (see appendix). In the event that a sufficient number of subjects is not expected to
be available at the Burn Unit of the ISR, one additional site will be recruited for subject enrollment. Several burn centers (Indianapolis,
Seattle, Los Angeles, Phoenix, Baltimore, Washington, DC) have sufficient census records to meet the requirements of the study,
and will be interviewed as candidates for participation. Dr. Boyce will assist LWI with this recruitment.

 

5.2.8
Timetable for availability of autologous ESS for massive burns.

 

As
described above, the requested support will be applied to activation of cGMP manufacturing of ESS from Lonza Walkersville, Inc.,
and to planning for clinical availability to the USAISR, or other qualified burn center. Below is a Gantt chart (Table 2) which
summarizes the schedule for completion of regulatory and operational requirements for the project, based on the assumption that
all parties make reasonable efforts to complete the project according to this timeline. Assuming start of funding by 1 Jul 2009,
and with the collaborative efforts of all parties, the applicants believe this goal can be reached in the second calendar quarter
of 2010.

    	33

    	 

    

 

Table
2. Schedule for project performance.

 

 

 

6.
Clinical Trial:

 

Planning
of the clinical study trial design will be based on previous studies under IDE G980023, with revisions according to advice of
the investigators at the USAISR, the RCCC-AFIRM Clinical Trials Core Facility, and discussions with FDA.

 

6.1
Experimental design and end points. A matched-pair comparison format will be used to evaluate ESS and conventional split-thickness
skin graft for closure of full-thickness, excised burns. This study will be performed in a prospective, randomized fashion with
each pair in the same patient on wounds of similar size and depth. For each administration of ESS to a wound site, a comparative
site will be treated with meshed split-thickness autograft skin (AG). Application of the specific treatment to site A or B will
be randomized prior to initiation of the study. Up to 10 randomized pairs will be generated.

 

Wound
treatment and dressings. Burns will be debrided by excision as early as possible after burn injury and wounds will be covered
with fresh or cryopreserved cadaver allograft or Integra Dermal Regeneration TemplateTM (IDRT). One day prior to surgery,
allograft or the silicone cover on IDRT will be removed, the wounds will be irrigated overnight with an appropriate antimicrobial
solution (i.e., 5% wt/vol Sulfamylon solution), and the graftswill be applied the following day32Wound preparation for each site
will be recorded at the time of surgery. Wound dressings will be administered as described previously26,33,34, using a non-adhesive
porous dressing (ie., N-Terface, Winfield Laboratories) in direct contact with the cultured skin covered with fine mesh gauze
and bulky dressings. Dressings for skin substitutes will be irrigated32 with nutrients, plus non-cytotoxic antimicrobial drugs
(i.e., GU irrigant, polymyxin B, mupirocin, ciprofloxacin, amphotericin B)35 over the N-Terface for 5 days. On POD 5, wet dressings
will be discontinued, and changed into an ointment-impregnated synthetic mesh (i.e., Adaptic) until complete wound closure is
achieved. For ESS a topical ointment consisting of equal parts Neosporin, Bactroban and Nystatin (NBN) will be used.

 

6.2
Enrollment criteria.

 

6.2.1
Medical indication. Patient has full-thickness burns equal to, or greater than, 50% of the Total Body Surface Area.

 

6.2.2
Medical conditions. Patient is not septic, and is expected to require ongoing skin grafting for a period longer than
3 weeks after collection of a skin biopsy to generate ESS

6.2.3
Age and gender. Age 18 years or older, either gender.

 

6.2.4
Social requirements. Patient is not pregnant or lactating, not a prisoner, and not mentally incompetent.

 

6.2.5
Completion of Informed Consent Form, and Health Insurance Portability and Accountability Act (HIPAA) forms.

    	34

    	 

    

 

6.3
Study end points for safety. Device safety will be assessed in comparison to AG by: a) frequency of regrafting on or before
POD 28; b) anticipated and unanticipated adverse device effects; and c) histopathologic interpretation of healed wound biopsies.
Late graft stability will be recorded but is not a safety endpoint.

 

6.3.1
Frequency of regrafting of comparative sites will be recorded at POD 28. Each site will be scored for regrafting as
None, Partial, or Total. Comparative sites will be randomized according to a pre-determined schedule prior to the placement of
the ESS.

 

6.3.2
Anticipated and unanticipated adverse device effects will be adapted from a list of approved by FDA from the previous
study of the prototype device (see section 6.6). Those events will be incorporated into the Investigators Brochure, and recorded
in the Case Report Forms. Serious adverse events will be reported within 72 hrs to the sponsor, local IRB, AFIRM Clinical Trials
Unit and FDA IDE office.

 

6.3.3
Histopathologic interpretation will be made by a dermato-pathologist from histological slides of biopsies (up to 4/pt
during first year after grafting) taken from healed wounds. Interpretations of the epidermis, the dermal-epidermal junction, and
dermis will be made according to dermato-pathological standards.

 

6.4
Study end points for efficacy. The primary end point for device efficacy is a statistically significant increase in the donor
skin area of the closed wound at post operative day (POD) 28 divided by the area of the donor skin used to close that area (section
6.4.1). Secondary end points for efficacy include: a) Percentage engraftment (i.e., closed wound) at POD 14 (section 6.3.2); b)
Percentage TBSA closed at POD 28; and c) scoring of scar qualities of erythema, pigmentation, pliability and scar height by the
Vancouver Scar Scale.

 

6.4.1
Donor skin expansion ratio. This ratio of healed wound area to biopsy skin area allows determination of donor site
utilization. For ESS donor skin area will be traced at the time of isolation of cells to initiate device fabrication. For AG,
donor skin area will be traced after application to the comparative site, and the mesh ratio (i.e., 1:2; 1:3; 1:4) will be recorded.
The areas of the tracings will be determined by computer assisted image analysis. The donor skin expansion ratio will be calculated
for each treatment site from at POD 28 as:

 

Closed
wound area / donor skin area = donor skin expansion ratio

 

The
donor skin expansion ratio for ESS, the prototype of ESS has been reported to be more than 10X greater than for AG 27,28. This
outcome defines a primary medical benefit of ESS compared to AG in the treatment of extensive, full-thickness burns.

 

6.4.2
Percentage engraftment is determined by tracings of the grafted sites at POD 14 followed by planimetry. The tracing
at POD 14 allows determination of % engraftment as healed area/treated area X 100.

 

6.4.3
Percentage TBSA closed is determined by dividing the absolute values of all of the areas closed, as measured by tracings
and planimetry at POD 28, by the absolute value of the TBSA, and multiplying X 100. The percentage TBSA covered with split-thickness
skin autograft is determined by subtracting the absolute value of the area closed with ESS from the absolute value of the area
grafted, dividing by the absolute value of the TBSA, and multiplying X 100.

 

6.4.4
Scar qualities by the Vancouver Scar Scale 36. Both sites will be scored for erythema, pigmentation, pliability and
scar height on semi-quantitative, ordinal scales. Erythema ranges from 0 (normal) to 3 (purple), pigmentation is rated from 0
(hypo) to 3 (hyper), scar height is scored from 0 (flat) to 3 (>5 mm), and pliability from 0 (normal) to 5 (contracture).

 

6.4.5
Long term efficacy observations. This trial is designed as a short term feasibility study. However, recipients will
be monitored at 12 months after application for efficacy parameters including overall medical condition and complications referable
to the burn; skin coverage assessed by the Vancouver Scar Scale, frequency of regrafting and evidence of inflammation by histopathology.

    	35

    	 

    

 

6.4.6
Table of safety and efficacy end points for assessment of ESS

 

Table
3. Data collection schedule for assessment of ESS and AG in burn patients.

 

	Primary
    Analyses at 4 weeks & 1 year after comparative treatment
	Type	Endpoint	POD	-7	0	7±3	14±3	28±3	365±30
	Safety	Microbiology
    cultures of wound	X	X	X	X		
	Efficacy	%
    Engraftment				X		
	Efficacy	Donor
    skin expansion ratio					X	
	Efficacy	%
    TBSA closed					X	
	Efficacy	Vancouver
    Scar Scale					X	X
	Efficacy	Photography		X	X	X	X	X
	Safety	Frequency
    of regrafting					X	
	Safety	Histopathology					X	X

 

6.5
Statistical power analysis.

 

Based
on the data collected for determination of device efficacy as the ratio of closed wound areas to donor skin areas, a statistical
power analysis was performed using data from 54 subjects previously reported 2. The mean ratio of the autologous ESS device was
63.9. This value for ESS was compared to a single value of 4.0 which was assigned to split-thickness skin autograft (AG) because
the combined areas treated with AG were not measured directly, but were calculated by subtraction of the total area closed with
ESS from the total burn area. In practice, the ratio for AG was actually closer to 2.0. Table 3 below shows that for power values
of 0.95, 0.90, 0.80, and 0.50, the sample sizes required are 11, 10, 8 and 5 respectively. Therefore, it is expected that efficacy
of the ESS device can be demonstrated in less than one year of enrollment of adult subjects at the USAISR, and at another qualified
burn center which treats adults.

 

Table
4. Statistical power analysis for clinical trial of ESS compared to meshed autograft skin based on expansion ratios. This
analysis was performed using a 2-sided, one sample paired T-test.

 

	
    Power analysis for Prospective Trial of ESS
	Alpha	Beta	power	ESS
    mean	AG
    mean	difference	Std	n
	0.05	0.05	0.95	63.93	4.0	59.96	48.8	11
	0.05	0.10	0.90	63.93	4.0	59.96	48.8	10
	0.05	0.20	0.80	63.93	4.0	59.96	48.8	8
	0.05	0.50	0.50	63.93	4.0	59.96	48.8	5

 

This
analysis makes two important assumptions that the ESS device performs comparably:

a)
to the ESS device used in previous studies; and, b) in adults as in pediatric subjects.

 

Based
on this analysis and the resources available, this initial trial proposes to treat no less than 8, and no more than 10 subjects
as a proof-of-principle (i.e., pre-pivotal) study. Lonza will deliver up to 40,000 cm2 (4.0 m2) of autologous engineered skin
for the proposed study.

    	36

    	 

    

 

6.6
Process for review, performance and compliance of FDA-regulated, clinical trials through the

AFIRM
consortium.

 

Several
considerations for study validity and regulatory compliance are required prior to initiation of clinical trials. This study with
engineered skin is one example of a general process for clinical trial and technology transfer. The RCCC-AFIRM consortium has
established a Clinical Trials Core located at Case Western Reserve University and the Cleveland Clinic Foundation for data management
and regulatory oversight of studies it supports.

 

6.6.1
Data Safety Monitoring

 

Each
clinical trial site will have its own management plans for data safety monitoring. A CRO will provide external oversight of data
collection and audit compliance with all aspects of the study. If two sites are used for the clinical trial, an independent Data
Safety Monitoring Board will be established to review adverse event (AE) reporting during the conduct of the trial. This independent
body will report information to the PI, the AFIRM Clinical Trials Core, and will advise on reporting to the institutional IRBs
and the FDA.

 

The
AFIRM Clinical Trials Core will coordinate the multi-site clinical data using a web-based CFR Part 11-compliant electronic database
for recording and verification of data collection in real time. The Core will monitor IRB and FDA approvals, amendments, and annual
reports. Updated consents and clinical protocol will be available for online access. It will maintain records for subject registration,
patient demographics, accrual dates, key event dates, including graft placement and timed follow-up assessment results. It will
record all clinical data on electronic Case Report Forms (CRFs).

 

Major
outcome and study endpoint parameters will be monitored, including overall medical condition and complications referable to the
burn, such as skin coverage assessed by the Vancouver Scar Scale, frequency of re-grafting, and evidence of inflammation by histopathology.
Adverse and serious adverse event data collected at the study sites will be maintained and monitored. Serious adverse event definitions
will be compliant with national reporting standards and will use conventional definitions for burn patients. All organ assessment
and adverse events will be recorded during the 28 d observation period after graft placement.

 

The Clinical
Trials Core database will be available under secure access for audit, and will be reported to the AFIRM executive committee, individual
PIs and the device supplier, Lonza Walkersville, Inc.

 

6.6.2 Data
Safety Monitoring Plan

 

Each institution
will utilize its own Data Safety Monitoring Plan. The following list outlines general components that will be included:

 

• Review
by a Data, Safety and Toxicology Committee (DSTC)

• Review
of annual and special reports

• Management
of Oversight Conflict of Interest

• Plans
for Assuring Compliance with the Requirements Regarding Reporting of Adverse Events

• Plans
for Assuring Temporary or Permanent Suspension of Clinical Trial Protocols

• Plans
for Assuring Data Accuracy and Protocol Compliance

• Compliance
Audits

• Quality
Assurance (Database Edit Checking, Chart Audits, Protocol Compliance, Registration On-Study, Internal Audit Process)

• Management
of Multi-center Trials (Industry and Academic trials)

• Study
Coordinator Reviews

• Corrective
Actions

    	37

    	 

    

 

6.6.3 Reviews
required prior to clinical protocol approval and activation:

 

• AFIRM
scientific review committee.

• USAMRMC
clinical trials office at Fort Detrick.

• Review
and IRB approval by performance site (ISR and other).

• Review
and permission to proceed from FDA.

• The
pre-IDE meeting with the FDA will be scheduled within three months of project activation.

 Documents
submitted will be used to develop specific questions for the pre-IDE meeting. At that point, LWI will submit to FDA the IDE with
final protocol, final manufacturing SOPs for the PermaDerm product and monitoring plans for the trial. We expect to have provisional
IRB review pending IDE review by the FDA. Once the IDE is allowed, after the 30 day review period, we will seek final site approval
of the IRB.

•
Data collection, internal review and reporting to FDA. Complete enrollment and file final report.

 

The
application of resources from this supplement is anticipated to expedite the availability of ESS for treatment of bured soldiers
in 12-18 months from initiation of funding, rather than 24-36 months if supplemental support is not available. The expedition
of delivery of ESS is expected to demonstrate proof-of-principle for life-saving medical benefits and improvements in outcome
for military and civilian patients with massive burn injuries.

    	38

    	 

    

 

7. Abbreviations
and Acronyms:

 

	AFIRM:	Armed
    Forces Institutes for Regenerative Medicine
	AG:	split-thickness
    skin AutoGraft
	CBSW:	Cambrex
    BioScience Walkersville, Inc.
	cGCP:	current
    Good Clinical Practices
	cGMP:	current
    Good Manufacturing Practices
	CRFs:	Case
    Report Forms for the study
	CTC:	Clinical
    Trials Core facility of the RCCC-AFIRM at Case Western Reserve University
	ESS:	autologous
    Engineered Skin Substitutes
	FDA:	United
    States Food and Drug Administration
	HSRRB:	Human
    Subjects Research Review Board
	HUD:
     	Humanitarian
    Use Device
	IDE:	Investigative
    Device Exemption
	IDRT:	Integra
    Dermal Regeneration TemplateTM
	IRB:	Institutional
    Review Board
	LWI:	Lonza
    Walkersville, Inc.
	ORCRA:	Office
    of Research Compliance and Regulatory Affairs
	ORP:	Office
    of Research Protections
	PD:	PermaDermTM;
    trade name for engineered skin substitutes
	PMA:	Pre-Market
    Approval
	POD:	Post-operative
    day
	SEM:	Standard
    error of the mean
	TBSA:
     	Total
    Body Surface Area
	USAISR:	United
    States Army Institute for Surgical Research
	USAMRMC:	United
    States Army Medical Research and Materiel Command
	DMEM:	Dulbecco's
    Modified Eagle Medium
	KGM-CD:	Keratinocyte
    Growth Medium - Chemically Defined
	UCMC:	ESS
    Keratinocyte Growth and Culture Mediu

    	39

    	 

    

 

8.
References 

 

1.
Boyce ST, Kagan RJ, Greenhalgh DG et al. Cultured skin substitutes reduce requirements for

harvesting
of skin autograft for closure of excised, full-thickness burns. J Trauma 2006; 60:821-829.

2.
Boyce ST, Greenhalgh DG, Palmieri T et al. Autologous cultured skin substitutes reduce requirement for split-thickness skin autograft
in treatment of excised, full-thickness burns. J Burn Care Res 2006;27:S59.

3.
Boyce ST, Simpson PS, Kagan RJ. Survival of burns involving 90% of the total body surface area after treatment with autologous
engineered skin substitutes. Proc of 2008 Army Science Conference . 2008.

4.
Hall JR. The total cost of fire in the United States through 1991. In: Quincy MA ed. National Fire Protection Association. 1993:1-20.

5.
Shires GT. Evolution of trauma and trauma research. J Trauma 1990; 30:107s-115s.

6.
American Burn Association. National Burn Repository: 2005 Report. 2006. American Burn

Association.

7.
The Burn Foundation. Burn incidence and treatment in the United States. www.burnfoundation.org. 1999. Philadephia, PA.

8.
Renz E, Barnes S. Long-range air transport of combat-related burn casualties. Proc ATACCC . 2007.

9.
Hansbrough JF, Dominic W, Gadd M et al. Burns: critical decisions. Prob Crit Care 1987; 1(14):558-610.

10.
Burn Registry Committee ABA. Comparison of hospital days, ICU days, and days on ventilator support. National Burn Repository 2002;
2002:7-35.

11.
Kagan RJ. Restoring nitrogen balance after burn injury. Compr Ther 1991; 17(3):60-67.

12.
Kagan RJ, Warden GD. Management of the burn wound. Clin Dermatol 1994; 12:47-56.

13.
Boyce ST, Supp AP, Swope VB et al. Vitamin C regulates keratinocyte viability, epidermal barrier, and basement membrane in vitro,
and reduces wound contraction after grafting of cultured skin substitutes. J Invest Dermatol 2002; 118:565-572.

14.
Supp DM, Karpinski AC, Boyce ST. Vascular endothelial growth factor overexpression increases vascularization by murine but not
human endothelial cells in cultured skin substitutes grafted to athymic mice. J Burn Care Rehabil 2004; 25:337-345.

15.
Goretsky MJ, Harriger MD, Supp AP et al. Expression of interleukin 1α, interleukin 6, and basic fibroblast growth factor
by cultured skin substitutes before and after grafting to full-thickness wounds in athymic mice. J Trauma 1996; 40:894-900.

16.
LePoole IC, Boyce ST. Keratinocytes suppress transforming growth factor beta-1 expression by fibroblasts in cultured skin substitutes.
Br J Dermatol 1999; 140:409-416.

17.
Boyce ST. Epidermis as a secretory tissue. J Invest Dermatol 1994; (editorial)102:8-10.

18.
Boyce ST. Method and apparatus for preparing composite skin replacements. University of California San Diego. [5,273,900]. 1993.
United States of America.

19.
Boyce ST. Apparatus for preparing composite skin replacements. University of California San Diego. [5,711,172]. 1998. United States
of America.

20.
Boyce ST. Method and apparatus for preparing composite skin replacements. University of California San Diego. [5,976,878]. 1999.
United States of America.

21.
Boyce ST. Apparatus for forming a biocompatible matrix. University of Cincinnati and Shriners Hospitals for Children. [6,905,105].
2005. United States of America.

22.
Boyce ST. Apparatus for preparing a biocompatible matrix. University of Cincinnati and Shriners Hospitals for Children. [7,452,720B2].
2008. United States of America.

23.
Boyce ST. Method and apparatus for preparing composite skin replacements. University of California San Diego. [363,400]. 1993.
Europe.

24.
Boyce ST. A surgical device for replacement of skin. University of Cincinnati and Shriners Hospitals for Children. 47359. 2007.
European Union.

25.
Lonza Group Ltd. Lonza full-year 2008 results. 2009. Lonza Corporation.

26.
Boyce ST, Kagan RJ, Yakuboff KP et al. Cultured skin substitutes reduce donor skin harvesting for closure of excised, full-thickness
burns. Ann Surg 2002; 235:269-279.

27.
Armour AD, Dorr BA, Kagan RJ, Boyce ST. Mortality of acute burns treated with cultured skin substitutes. J Burn Care Res 28[2],
S96. 2007.

    	40

    	 

    

 

28.
Supp DM, Wilson-Landy K, Boyce ST. Human dermal microvascular endothelial cells form vascular analogs in cultured skin substitutes
after grafting to athymic mice. FASEB J 2002; 16:797-804.

29.
Boyce ST, Foreman TJ, English KB et al. Skin wound closure in athymic mice with cultured human cells, biopolymers, and growth
factors. Surgery 1991; 110:866-876.

30.
Supp DM, Supp AP, Morgan JR et al. Genetic modification of cultured skin substitutes by transduction of human keratinocytes and
fibroblasts with Platelet Derived Growth Factor-A. Wound Repair Regen 2000; 8:26-35.

31.
Supp DM, Boyce ST. Overexpression of vascular endothelial growth factor accelerates early

vascularization
and improves healing of genetically modified cultured skin substitutes. J Burn Care Rehabil 2002; 23:10-20.

32.
Warden GD, Saffle JR, Kravitz M. A two-stage technique for excision and grafting of burn wounds. J Trauma 1982; 22:98-103.

33.
Boyce ST, Greenhalgh DG, Kagan RJ et al. Skin anatomy and antigen expression after burn wound closure with composite grafts of
cultured skin cells and biopolymers. Plast Reconstr Surg 1993; 91:632-641.

34.
Boyce ST, Goretsky MJ, Greenhalgh DG et al. Comparative assessment of cultured skin substitutes and native skin autograft for
treatment of full-thickness burns. Ann Surg 1995; 222(6):743-752.

35.
Boyce ST, Warden GD, Holder IA. Non-cytotoxic combinations of topical antimicrobial agents for use with cultured skin. Antimicrob
Agents Chemother 1995; 39(6):1324-1328.

36.
Sullivan T, Smith H, Kermode J et al. Rating the burn scar. J Burn Care Rehabil 1990; 11(3):256-260.

 

    	41

    	 

    

 

10
Facilities and equipment descriptions 

 

10.1
General Description 

 

Manufacturing
of ESS will be performed at Lonza’s facility in Walkersville, Maryland. Lonza is a leading manufacturer of specialty cellular
biotherapeutics. Regulatory licenses include:

 

Device Registration
Number 1114298

Tissue Registration
Number 1114298

CBER License
Number 1701

SO Certification
Number FM67851

Federal
ID Number 953917176

 

Lonza
also manufactures endotoxin detection products at the Walkersville facility that are licensed by the FDA. The facility has been
regularly inspected in conjunction with licensure of these products. As ESS is not a commercial product, inspection by the FDA
has not yet been triggered. are licensed by the FDA. The facility has been regularly inspected in conjunction with licensure of
these products. As ESS is not a commercial product, inspection by the FDA has not yet been triggered.

 

10.2
Facilities at Lonza Walkersville, Inc.

 

The
Walkersville facility currently has eight completed suites, each ranging in size from 340 to over 800 square feet (+/- 5% ) of
core lab space and full suite areas (including staging areas and gown in/ gown out) ranging from 600 to 1380 (see schematic floor
plans). Lonza also has additional commercial-scale suites under construction in Walkersville. There are also four suites dedicated
to cell therapy manufacturing at the Verviers, Belgium facility. The Walkersville facility currently has eight completed suites,
each ranging in size from 340 to over 800 square feet (+/- 5% ) of core lab space and full suite areas (including staging areas
and gown in/ gown out) ranging from 600 to 1380 (see schematic floor plans). Lonza also has additional commercial-scale suites
under construction in Walkersville. There are also four suites dedicated to cell therapy manufacturing at the Verviers, Belgium
facility.

 

ESS
production will likely be performed in Cell Therapy Suite A. Room 2306 is a Class 10,000 (ISO Class 7) production suite. It includes
four Class 100 biological safety cabinets, 18 humidified incubators, 1 freezer, and 1 refrigerator. Cell Therapy Suite A consists
of 6 rooms. It includes 2 class 100,000 airlocks (Room 2302 and 2304) and class 10,000 ingress/egress areas (Rooms 2305 and 2307),
a staging area (Room 2317) and a Cell Culture Production area (Room 2306). A materials pass through is built in the wall separating
Rooms 2306 and 2305. The walls are composed of fiberglass (FRP board). The floors are made of a troweled epoxy covering. The class
10,000 area is at a positive differential pressure to the outside. The room also includes HEPA filters on the ceiling and return
grates on the wall. The utility systems are independent of clean rooms. ESS production will likely be performed in Cell Therapy
Suite A. Room 2306 is a Class 10,000 (ISO Class 7) production suite. It includes four Class 100 biological safety cabinets, 18
humidified incubators, 1 freezer, and 1 refrigerator. Cell Therapy Suite A consists of 6 rooms. It includes 2 class 100,000 airlocks
(Room 2302 and 2304) and class 10,000 ingress/egress areas (Rooms 2305 and 2307), a staging area (Room 2317) and a Cell Culture
Production area (Room 2306). A materials pass through is built in the wall separating Rooms 2306 and 2305. The walls are composed
of fiberglass (FRP board). The floors are made of a troweled epoxy covering. The class 10,000 area is at a positive differential
pressure to the outside. The room also includes HEPA filters on the ceiling and return grates on the wall. The utility systems
are independent of clean rooms.

 

 

 

Figure
12. Typical cell therapy manufacturing suite at Lonza Walkersville, Inc. LWI has several manufacturing suites for cell therapy
including all support facilities, a proven track record of compliance with cGMP/ISO standards, and highly trained staff with all
of the expertise needed for this project.

    	42

    	 

    

 

	Figure
        13. Cell therapy suites  at
        Lonza Walkersville, Inc. The most recent addition to the Walkersville facility includes these 4 suites including 3 class 10,000
        suites and a single class B suite. There is more than 2,800 square feet of classified space in this addition

 

10.3
Equipment:

Each
of the Cell Therapy facilities is equipped with state-of-the-art manufacturing and analysis equipment to meet the needs of our
many clients. This equipment includes everything required for cell culture and expansion, process development, quality assurance,
labeling, packaging, and storage and shipping. Equipment is maintained in a validated/calibrated state and remotely alarmed providing
24 hour monitoring. Below is a list of equipment that will be used for the performance of this proposal.

 

Table
5. Manufacturing Equipment:

 

	Item	Manufacturer	Qty	Comments
	Biosafety
    Cabinets 	Various	20	Between
    1 and 4 BSCs are available within each suite
	Incubators	Thermo
                                                                                                                                   3950

        Thermo
        3110

        Sheldon

        Belco
	11

        51

        2

        29
	These
    incubators have various capacities and are organized among the Walkersville suites.
	Centrifuges
     	Sorvall	8	Each
    suite is equipped with a refrigerated centrifuge
	Inverted
    microscope and camera	Various	Several	Each
    suite is equipped with an inverted or standard microscope.  Cameras can be attached to camera ports for documentation
	Refrigerator	Various
     	Several	Each
    suite has a minimum of one refrigerator for materials and/or product storage.  Refrigerators are alarmed.
	Freezer
     	Various
     	Several	Each
    suite has a minimum of one freezer for materials and/or product storage.  Freezers are alarmed.
	Liquid
    Nitrogen Dewers	Various
     	Several	Liquid
    nitrogen is available as needed and is handled through Dewar containers.
	Transport
    Dewers 	Various
     	Several	Carts,
    dewars and appropriate transport equipment is available to all suites
	Cell
    counter (nucleated)	Guava
    PCA	Several	Shared
    resource and QA lab is equipped with cell counters to support suite activities
	Controlled
    rate freezers	Thermo
    Cryomed	Several	Most
    suites are equipped with controlled rate freezers

    	43

    	 

    

 

10.4
Regulatory and Commercialization Plan 

 

Since
its inception in January 2002, Lonza’s Cell Therapy business unit has developed a global leadership position in cell therapy
manufacturing and process development. With the purchase of the ESS device/ESS technology in 2006 and the expansion of manufacturing
facilities in Walkersville, Maryland, Lonza is positioned to meet the regulatory and manufacturing requisites for the commercialization
of the ESS technology. It is anticipated that the successful completion of the clinical trial design, as described in this proposal,
with a limited number of patients, will accelerate commercial launch by providing statistically significant data on the primary
efficacy of the ESS technology (i.e., closure rate) in severely burned soldiers within a short timeframe.

 

With
the support of the Rutgers/Cleveland Clinic Consortium of the AFIRM network, Lonza will be positioned to commercialize the ESS
technology for critically burned patients, for both soldiers and civilians alike. In conjunction with AFIRM consultants, Lonza
anticipates scheduling a pre-IDE meeting with the FDA within three months with the goal of an IDE submission by Q2 2009, and enrolling
patients in Q1 2010. Lonza is responsible for the IDE submission, and Lonza will make reasonable efforts to prepare the components
necessary for the IDE submission, including but not limited to generation of SOPs, preparation of facilities, regulatory compliance
of manufacturing, release and shipping, training, preparation for inspections, and pilot or engineering runs as directed by the
FDA. Lonza expects to manage and engage a CRO for assistance in two critical areas:

 

1)
Author full clinical protocol

2)
Trial oversight (e.g. – coordination, implementation, investigator notebooks, case report forms, perform monitoring, reporting,
data safety monitoring plan)

 

Additionally,
Lonza will continue to work with AFIRM resources to ensure clinical trial compliance. Following the IDE submission and clinical
data evaluation, Lonza intends to follow the FDA recommendations on a PMA submission for market approval of the ESS device.

 

The
ESS technology will require a manufacturer with significant experience in tissue engineering and the resources to scale to meet
commercial needs. Lonza has the commitment and expertise to support these requirements. Since the catastrophic burn market is
relatively small (estimated at 2,000 patients annually in the U.S), patients are treated at a small number of centers in the US,
requiring a limited investment in sales and marketing efforts. Lonza has a focused technical staff to successfully complete the
coordination and training necessary to meet market requirements.

 

Depending
on clinical trial outcomes, Lonza is prepared to invest as necessary, to support pursuit of ESS development along the commercial
pathway. To ensure that the timeline for marketing approval is as expeditious as possible, Lonza may collaborate with a commercial
partner who has specific expertise in the wound care market. Lonza is committed to manufacturing of the ESS device to support
patients’ needs.

    	44

    	 

    

 

11.
Patents relevant to autologous engineered skin substitutes.

11.1
Boyce ST. 1993. European Patent 363,400, "Method and apparatus for preparing composite skin replacement". Assignee:
University of California.

11.2
Boyce ST. 1993. US Patent 5,273,900, "Method and apparatus for preparing composite skin replacement." Assignee:
University of California.

11.3
Boyce ST. 1998. US Patent 5,711,172, “Apparatus for preparing composite skin replacement”. Assignee: University
of California.

11.4
Boyce ST. 1999. US Patent 5,976,878, “Method and apparatus for preparing composite skin replacement”. Assignee:
University of California.

11.5
Boyce ST. 2005. US Patent 6,905,105, “Apparatus for fabricating a biocompatible matrix”. Assignees:University
of Cincinnati and Shriners Hospitals for Children.

11.6
Boyce ST. 2007. European Patent application #47359, "A surgical device for replacement of skin". Assignees: University
of Cincinnati and Shriners Hospitals for Children. Claims allowed, 11 Jul 2007.

11.7
Boyce ST. 2008. US patent 7,452,720B2, “Apparatus for preparing a biocompatible matrix”. Assignees: University
of Cincinnati and Shriners Hospitals for Children. Claims allowed, July 2008.

11.8
Boyce ST. 2002. US patent application, publication #US2003/0170892, “A surgical device for replacement of skin”.
Assignees: University of Cincinnati and Shriners Hospitals for Children. Pending review.

 

12.
Intellectual and material property plan. (see sections 1.4 and 10)

    	45

    	 

    

 

Budget
Justification: 

 

Personnel
– Faculty 

The
management of this project will be a coordinated effort by three Principal Investigators, one each from:

1.
Lonza Walkersville, Inc (LWI) for overall project performance, device manufacture and quality assurance, and regulatory management
with FDA.

2.
The Clinical Trials Office of the AFIRM-RCCC at Case Western Reserve University for trial design, data safety monitoring, and
regulatory compliance of the study with standards required by the USAMRMC and AFIRM.

3.
The Institute for Surgical Research at the Brooke Army Medical Center at Fort Sam Houston which will be one of two clinical performance
sites.

 

Kim
Warren, PhD will serve as principal investigator for the project at LWI. Dr. Warren is the Head of Cell Therapy Development
at LWI and guides the Process Development and R&D Departments in the Cell Therapy business unit. Together with the Cell Therapy
production and regulatory divisions at LWI, Dr. Warren will coordinate the manufacture of the autologous engineered skin device,
ESS, and its delivery to the clinical performance sites. She will also serve as liaison to a Clinical Research Organization (CRO)
which will be contracted by LWI to generate documentation needed for the study, and track the activities of the CRO.

 

Stanton
Gerson, MD serves as the Director of the Center for Stem Cell & Regenerative Medicine at Case Western Reserve University.
He has extensive experience is performance of clinical trials with cancer treatments, including stem cell therapies. Dr. Gerson
will provide assurances of regulatory compliance, data safety monitoring, and assist with review of the study design and statistical
analysis of study data. His Center has successfully conducted numerous clinical trials with full regulatory compliance. The Center
will work directly with the CRO on contract from Lonza develop the regulatory documents for the study, the investigators brochure
and case report forms for data collection. Participation of Dr. Gerson’s Center provides great confidence that regulatory
compliance of the study will be fully satisfactory to AFIRM and FDA.

 

Jane
Reese serves as Operations Director of the Center for Stem Cell & Regenerative Medicine at Case Western Reserve University
and works closely with Dr. Gerson. She will assist with data monitoring and compliance and coordination of the multi-site clinical
trial.

 

Steven
Wolf, MD holds positions as Professor of Surgery in the Department of Surgery at the University of Texas Health Sciences Center
in San Antonio, and director of clinical research at the USAISR. Dr. Wolf will provide advice on planning of clinical applications
of autologous engineered skin substitutes at the burn unit at the USAISR. His experience and guidance will greatly facilitate
the prospective availability of the investigative therapy for wounded soldiers.

 

Howard
Schrayer is an independent consultant to the medical device industry, with more than 25 years experience. His consulting activities
are focused on formulating regulatory strategies for medical devices. Mr. Schrayer will serve as a regulatory consultant for this
project. His approximate 5% effort contribution is funded by RCCC-AFIRM.

 

Steven
Boyce, PhD is the inventor of the ESS technology, and will serve as a technical consultant to the project up to two days per
month (10% time). He holds positions as Professor in the Departments of Surgery and Biomedical Engineering at the University of
Cincinnati, and directs the Engineered Skin Laboratories at the Cincinnati Shriners Burns Hospital. He will be available to advise
on the development of the IDE application, study documents, and will assist with recruitment of a second study site. In addition,
Dr. Boyce will continue to provide technical advice for the manufacture of ESS, design of shipping materials and logistics, and
training of staff at the study sites.

 

Personnel
– Staff

 

Three
staff positions are requested at 25% FTE.

    	46

    	 

    

 

Production
Manager – Mark Tracy: will oversee the production staff and operations for the production of the engineered skin devices
for qualification runs and clinical trial. Mark and his staff are responsible for carrying out the production process including
isolation, expansion, seeding and harvest. Mark will also oversee completion of MBRs, cGMP documentation, and in-process testing.
Mark has 6 years experience in cell therapy production at LWI, including 4 years in a supervisory role.

 

Quality
Control Manager – John Semon: will oversee release testing of the engineered skin devices for qualification runs and
clinical trial. John and his staff are responsible for carrying out the bioburden, sterility, surface electrical capacitance and
histology tests. John has been a Quality Control Manager for more than 10 years.

 

Quality
Assurance Manager – Vicki Meckley: will oversee quality assurance of production activities, QA audits, controlled documentation
and release of engineered skin devices for qualification runs and clinical trial. Vicki has been managed the Quality Assurance
team for 4 years and has approximately 10 years experience in the field of biotechnology.

 

Device
Manufacture

 

The
ESS will be relatively expensive to produce for this initial clinical study from LWI. It is planned that the study will require
approximately 4m2 (40,000 cm2) with a cost of goods of $27.47/cm2 for an estimated total cost of $1,098,800; $889,552 of which
is charged to the grant budget. The remainder of the cost is a Lonza in-kind contribution. This amount of ESS is required to provide
between 0.36 and 0.42 m2 (3,600 - 4,200 cm2) for each of the 10 prospective subjects in the study. This amount per study subject
is needed to demonstrate the primary medical benefit which is conservation of donor skin. The study design would propose to manufacture
the ESS from a biopsy of split-thickness of an approximate area of 30-40 cm2 for an approximate expansion of the biopsy area by
100 fold. This expansion will demonstrate the primary medical benefit of the device which is reduction of skin harvesting to complete
wound closure.

 

Travel

 

Travel
costs are requested for the study sponsor (LWI; $15,000), and the associated participants ($10,000). Sponsor related travel will
include pre-study visits to the performance sites, training visits, and study closure visits for two staff members. Travel for
associated participants will include two on-site visits with the sponsor by Dr. Gerson, Ms. Reese, and Dr. Boyce.

 

Subcontracts:

 

A
contract research organization (CRO) will manage the daily operations of the study ($332,000). The CRO partner will be chosen
by Lonza. The budget is estimated based on a quote from a representative CRO.

 

Each
clinical site will receive a contract for actual costs to perform the study ($126,724 per site X 2 =$253,448). The budget is based
on treating 5 patients per clinical site. Final patient enrollment will depend on patient availability.

 

Contributions
in-kind from Lonza:

 

1.
Preparation of facilities including certification and inspection.

2.
Development of packaging and shipping materials.

3.
Comparability study (as needed).

4.
Project administration.

5.
Salaries of key personnel.

6.
Majority of production staff payroll expense.

7.
Dr. Steven Boyce consultancy.

8.
Intellectual Property expenses

    	47

    	 

    

 

9.
Process development expenses.

10.
Site and manufacturing regulatory compliance.

 

Appendix
List:

 

1.
Letter of collaboration, USAISR

2.
Letter of consultation, Steven Boyce, PhD

3.
Case Report Forms from previous study

4.
Boyce publications

4.1.
ASC 2008

4.2.
J Trauma 2006

    	48

    	 

    

 

 

    	49

    	 

    

 

 

    	50

    	 

    

 

 

    	51

    	 

    

 

 

    	52

    	 

    

 

 

	  	Steven
                                                                      Boyce, Ph.D.

        Professor

        Division
        of Burn Surgery

        Department
        of Surgery

        College
        of Medicine

        P.O.
        Box 670558

        Cincinnati
        OH 45267-0558

        Phone:
        (513) 872-6080

        Fax:
        (513) 872-6107

        Email:
        boycest@uc.edu

 

 

 

23
February 2009

 

Kim
Warren, Ph.D.

Lonza
Walkersville, Inc. (Lonza)

8830
Biggs Ford Road

Walkersville,
MD 21793

 

Re:
Proposal for clinical trial of PermaDerm for burns

 

Dear
Dr. Warren:

 

I
am pleased to serve as a consultant to Lonza’s proposal to perform a clinical trial of PermaDerm, an autologous engineered
skin substitute for treatment of life-threatening burns.

 

As
ou know, I have extensive expertise in the development of human cell culture systems, skin biology, wound healing, and biocompatability
of implantable materials. My research interests include mechanisms of wound healing with engineered human skin, and biologic fidelity
of engineered tissues to natural tissues by regulation of cellular phenotypes. My laboratory has developed engineering systems
for skin substitutes that are used to treat burn wounds with significant advantages to traditional split thickness skin grafting
procedures. These technologies have been translated to clinical investigations, patented, and licensed to Cutanogen Corporation
which is a subsidiary of Lonza. As the founder of Cutanogen Corporation, I have an established working relationship Lonza which
will facilitate accomplishment of the proposed clinical trial.

 

The
study which Lonza proposes is relatively simple in design, but will require both technical advice and close tracking of activities
to complete successfully. I shall be available to assist with study design, review of manufacturing procedures, and recruitment
of clinical study sites as needed. I shall also be available to act as liaison to other work groups within the RCCC-AFIRM consortium
to facilitate performance of the project.

 

There
delivery of an autologous engineered skin substitute for catastrophic burn injuries promises to raise the standard of burn care
nationwide, and reducing morbidity and mortality in this high-risk population of patients. I look forward to working with Lonza
to demonstrate these benefits, and to deliver this important new therapy.

 

I
wish you every success with the proposal.

 

Sincerely,

 

/s/
Steven Boyce

Steven
Boyce, Ph.D.

    	53

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE#
G980023

 

SCHEDULE
FOR DATA COLLECTION

 

	DATA
                                                                                                    COLLECTED

         
	Prestudy	CSS

        Surgery
        Day

        0
	POST-OPERATIVE
    DAY
	7	14	28	91	182	365	Later
    if possible
	Informed
    Consent	X								
	Past
    Medical History	X								
	Physical
    Exam	X	X			X	D/C			
	Serum
    for Antibodies	X				X				
	Skin
    Biopsy for Tracing & Culture	X								
	Pretreatment
    of Sites	X								
	Biopsy
    & Photo of Recipient Sites		X							
	Microbial
    Culture of Recipient Sites	X	X	X	X					
	Photography		X	X	X	X	X	X	X	X
	CSS
    Tracing In Vitro		X							
	Study
    Site Tracings				X	X				
	%
    Engraftment				X	X				
	Healed
    Area : Donor Area Ratio					X				
	Qualitative
    Outcome				X	X	X	X	X	X
	Healed
    Wound Biopsy (as possible)			X	X	X	X	X	X	X
	Adverse
    Event Summary				X	X				
	Investigator
    Global Assessment				X	X			X	

 

*Primary
data analysis will be performed on post-operative day 28, and as close as possible to day 365.

# Punch
biopsies (3mm) will be obtained at scheduled time points, not to exceed a total of 6 samples nor 5% of the healed graft.

    	54

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE#
G980023

 

Registration
Form

 

	Patient
    Initials:					Study
    Registration Number:	CSS
														
	Hospital
    ID#:					Gender:	M
    / F		
														
	Birthdate:			Age:			Race:		
		M
    / D / Y											
								Burn
    Date:		
	Admission
    Date:										M
    / D / Y	
		M
    / D / Y											
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

	TSBA
    (m2, from			%
    burned:			%
    2o:			%
    3o:	
	nomogram):										

 

 

Allergies:
_____________________________________________________________________

 

Inclusion
- Must answer "Yes" to the following:

 

	Yes		No		
					Age
    is birth - 75 years
					TBSA
    $50% (or $10% full thickness)
					Burn
    includes full thickness
					Patient
    is not showing signs of sepsis
					Expected
    to need grafting after 3 weeks post primary biopsy
					Informed
    Consent signed

 

Exclusion
- Must answer "No" to the following:

 

	Yes		No		
					Patient
    is pregnant or lactating
					Patient
    is a prisoner
					Patient
    is mentally incompetent

 

Date enrolled:
__________

M / D /
Y

    	55

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

 

	Patient
    Initials:			Date:	
					
	Study
    Registration Number: 	C
      S  S		Study
    Day:	Prestudy

 

PAST
MEDICAL HISTORY

 

		No	Yes	Comments
	HEENT			
	Respiratory			
	Cardiovascular			
	Gastrointestinal			
	Genitourinary			
	Musculoskeletal			
	Neurological			
	Endocrine			
	Substance
    Abuse			
	Psychological			
	Other			

 

Form
CSS 7.3

Revised:
October 2003

    	56

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials:			Date:	
					
	Study
    Registration Number: 	C
      S  S		Study
    Day:	

 

PHYSICAL
EXAM

 

 

			Admission
			Pre-surgery
			POD
    28
			Discharge

 

		Normal	Abnormal	Comments
	HEENT			
	Respiratory			
	Cardiac			
	Circulation
    check			
	Gastrointestinal			
	Genitourinary			
	Musculoskeletal			
	Neurological			
	Endocrine			
	Integumentary			

 

Serum for
circulating antibodies obtained:

 

	⁭	Prestudy	
			Date
			
	⁭	Study
    Day #28 	
			Date

 

Form CSS
7.4

Revised:
October 2003

    	57

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Burn
    Estimate and Diagram	Burn
    Diagram
	Age
    vs. Area		  
			
	Initial
    Evaluation	
			
	Pt.
    Initials:		
			
	Pt.
    Reg. No.:		
			
	Investigator		
	Completing
    Burn Diagram	
			
			
			
			
		Color
    Code	
		Red
    - 3o	
		Blue
    - 2o	
			
			
			
			
			

 

 

	Area	Birth
                                                                                                    1         yr.
	1-4
                                                                                                    Yrs.

	5-9
                                                                                                    Yrs.

	10-14
                                                                                                    Yrs.

	15
                                                                                                    Yrs

	Adult	2o	3o	Total	Donor
    Areas
	Head	19	17	13	11	9	7				
	Neck	2	2	2	2	2	2				
	Ant.
    Trunk	13	13	13	13	13	13				
	Post.
    Truck	13	13	13	13	13	13				
	R.
    Buttock	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2				
	L.
    Buttock	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2				
	Genitalia	1	1	1	1	1	1				
	R.U.
    Arm	4	4	4	4	4	4				
	L.U.
    Arm	4	4	4	4	4	4				
	R.L.
    Arm	3	3	3	3	3	3				
	L.L.
    Arm	3	3	3	3	3	3				
	R.
    Hand	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2				
	L.
    Hand	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2	2
    1⁄2				
	R.
    Thigh	5
    1⁄2	6
    1⁄2	8	8
    1⁄2	9	9
    1⁄2				
	L.
    Thigh	5
    1⁄2	6
    1⁄2	8	8
    1⁄2	9	9
    1⁄2				
	R.
    Leg	5	5	5
    1⁄2	6	6
    1⁄2	7				
	L.
    Leg	5	5	5
    1⁄2	6	6
    1⁄2	7				
	R.
    Foot	3
    1⁄2	3
    1⁄2	3
    1⁄2	3
    1⁄2	3
    1⁄2	3
    1⁄2				
	L.
    Foot	3
    1⁄2	3
    1⁄2	3
    1⁄2	3
    1⁄2	3
    1⁄2	3
    1⁄2				
							Total:				

 

Shriners
Hospital for Children

Cincinnati
Burns Institute

Burn Diagram

 

Form CSS
7.5

Revised:
October 2003

    	58

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials:			Date:	
					
	Study
    Registration Number:	C
    S S		Study
    Day:	Prestudy

 

	PRESTUDY
                                                                                                            DATA

         

	Primary
    Biopsy for Skin Cell Cultured obtained		Date
						PBD
				from		Donor
    site
						
							
	Parameter		Date			Site
    A	
    Site B
						AG	CSS	AG	CSS
	Excision
    of Eschar					
							
	Temporary
    wound coverage					
	achieved
    with:					
							
	Organisms
    Isolated					
	(only
    one pre-application					
	Microbiology
    culture needed)					
							
							
	Pretreatment
    Topicals Used:					
						
						
						
						
	Blood
    Culture	Organism
    Isolated	Treatment
    Meds	Systemic
    Treatment (dates)
				
				
				
	 	 	 	 	 	 	 	 	 	 

 

Form CSS
7.6

Revised:
October 2003

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

 

	Patient
    Initials:			Date:	
					
	Study
    Registration Number:	C
    S S		Study
    Day:	#0

 

 

 

 

 

 

	
	

	Recipient Wound Bed
		Pre-Application Data	Post-Application Data
	
         

        Study

        Site

        A

        B
	
        Temporary Cover Excised

         

_/_/_ (Date)

         

        _/_ /_ (Date)
	Punch Biopsy Taken	
        Microbial Culture Taken

        _ Y _ N

         

        _ Y _ N
	
        Photos Taken

        _ Y _ N

         

        _ Y
        _ N
	Type & Size of Grafts Applied
	_  Y _  N	
		
	_  Y _  N	
				Site Identification		
	
        Study Site

         

        A
	Location		Landmarks
			From ( ) to the center of Study Site measures ( )
			From ( ) to the center of Study Site measures ( )
	B			From ( ) to the center of Study Site measures ( )
				From ( ) to the center of Study Site measures ( )

    	

    	59

    	 

    

 

CULTURED
SKIN SUBSTITUTE

Protocol
#95-7-26-1 (autologous CSS)

IDE
# G980023

 

Patient
initials: __________________

Patient
registration number: CSS_________

 

ADVERSE
MEDICAL EVENTS

List
below any new event(s) or changes in the status of previously recorded event(s) including cessation of event(s)

	Instructions:

         

        Frequency:
        Check if constant or place a number that best describes frequency in the per day column.

         

        Duration:
        If not consistent, indicate the duration per episode. Place a number in box that best describes duration.

         
	Date
    Started M/D/Y	C

        O

        N

        T

        I

        N

        U

        I

        N

        G
	Date
    Stopped M/D/Y	Frequency	Duration	Relationship
                                                                                                    to Test Materials

        If
        unlikely, or not test material related, indicate probable cause
	Action(s)

        Taken

         

        (List
        as many as apply)
	O

        U

        T

        C

        O

        M

        E

	C

        O

        N

        S

        T

        A

        N

        T
	Per
    Day	M

        I

N

U

T

E

S
	HOURS	DAY
	EVENTS

        ⁭
        None
											

 

Keys:

	SEVERITY

         

        1.
        Mild

        2.
        Moderate

        3.
        Severe

        4.
        Life-threatening or

        intolerable

        5.
        Fatal
	Relationship
                                                                      to test

        material:

        1.
        Not related

        2.
        Unlikely related

        3.
        Possibly related

        4.
        Probably related

        5.
        Definitely related

         
	Action(s)
                                                                      Taken:

        1.
        None

        2.
        Test Material Dosage Reduced

        3.
        Test Material Administration Interrupted, Reinstated at Same Dose

        4.
        Test Material Administration Interrupted, Reinstated at Lower Dose

        5.
        Test Material Discontinued

        6.
        Medication Administered

        7.
        Treatment other than Medication Administered - Specify*

        8.
        Laboratory or other Diagnostic Test(s) Done

        9.
        Randomization code broken. Date __/__/__.

         
	Outcome:

        1.
        Recovered with treatment

        2.
        Recovered without treatment

        3.
        Alive with sequelae

        4.
        Event is continuing and controlled with treatment

        5.
        Event is continuing without treatment

        6.
        Patient died

        7.
        Unknown

         

 

—
Record in Concomitant Medications section of Case Report form

* Record
in Comments below

^ Note -
REPORT TO FDA and IRB, IF MEDICAL EVENT IS UNEXPECTED, SEVERE,

LIFE THREATENING
OR FATAL

 

	Comments:							__/__/__
					Investigator		

 

Form CSS
7.8

Revised:
October 2003

    	60

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials			Date:	
					
	Pt.
    Reg. No.	C
    S S		Study
    Day:	

 

 

Qualitative
Outcome

Site B

____ % healed
____ % healed

____ % open
____ % open

 

(The following
scores will reflect only those areas which are healed.)

*Required
Study Day: #14, #28, and subsequent clinic visits.

 

 

	Parameter	Site
    A score	Site
    B score
	Percentage:

        1)
        Erythema
	___	___	___	___	___	___	___	___
	0	1	2	3	0	1	2	3
	normal	pink	red	purple	normal	pink	red	purple
	Percentage:

        2)
        Pigmentation
	___	___	___	___	___	___	___	___
	0	1	2	3	0	1	2	3
	none	hypo	normal	hyper	none	hypo	normal	hyper
	Percentage:

        3)
        Skin Pliability
	___	___	___	___	___	___	___	___	___	___	___	___
	0	1	2	3	4	5	0	1	2	3	4	5
	Normal	Supple	Yielding	Firm	Rope	Contract	Normal	Supple	Yielding	Firm	Rope	Contract
	Percentage:

        4)
        Scar Height
	___	___	___	___	___	___	___	___
	0	1	2	3	0	1	2	3
	Flat	<
    2mm	>
    2mm	>
    5mm	Flat	<
    2mm	>
    2mm	>
    5mm
	5)
                                                                                        Site regrafting:

(If
        partial or total, see below)

         
	Total	Partial	None	Total	Partial	None

 

SITE
RECONSTRUCTION

 

		Site
    A	Site
    B
	Surgery
                                                                                        date

        Study
        day #

        Procedure

        %
        CSS remaining

        Was
        CSS excised?
		

 

    	61

    	 

    

	

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials			Date:	
					
	Pt.
    Reg. No.	C
    S S		Study
    Day #	

 

 

Investigator's
Global Assessment at POD 14

 

1) Percentage
healed graft (from tracing): Site A: ________ Site B: ________

A) Cause(s)
of failure of auto-CSS:

________________________

________________________

B) Is regrafting
needed: Yes ⁭ No ⁭

C) Date
that the manufacturer was notified of device failure:

D) Enter
the date of the Monday of the week in which regrafting is expected to be performed: _____________________________________

E) State
the type of graft that is expected to be used: auto-CSS ⁭ skin autograft ⁭

State reason
for choice: _____________________________________

 

2) Healed
area: donor area ratio for cultured skin substitute?

 

3) Were
there any adverse events during the course of this study?

 

No ___ Yes
___ (see adverse event record)

 

4) Status
of subject

 

___ Continues
in study

___ Discontinued
from study (see number 5)

 

5) If subject
was discontinued from the study, indicate reason:

 

___ graft
failure

___ adverse
event

___ subject
request

___ protocol
violation

___ other,
please specify _____________________________________

 

6) Was the
subject discharged with cultured skin intact?

 

Yes ___
No ___ Not yet discharged ___ Discharge date

 

To
Be Completed and Signed by Investigator

				Date
    Signed:	
	Principal
    Investigator		

    	62

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials			Date:	
					
	Pt.
    Reg. No.	C
    S S		Study
    Day #	

 

 

Investigator's
Global Assessment at POD 28

 

1) Percentage
healed graft (from tracing): Site A ___ Site B ___

 

2) Healed
area: donor area ratio for cultured skin substitute?

_____________________________

 

3) Were
there any adverse events during the course of this study?

 

No ___ Yes
___ (see adverse event record)

 

4) Status
of subject

___ Continues
in study

___ Discontinued
from study (see number 5)

 

5) If subject
was discontinued from the study, indicate reason:

 

___ graft
failure

___ adverse
event

___ subject
request

___ protocol
violation

___ other,
please specify _____________________________________

 

6) Was the
subject discharged with cultured skin intact?

 

Yes ___
No ___ Not yet discharged ___ Discharge date

 

To
Be Completed and Signed by Investigator

 

				Date
    Signed:	
	Principal
    Investigator		

    	63

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials			Pt.
    Reg. No.	CSS

 

	Date	Study
    Day	Site
    A	Site
    C
		Day
                                                                                                                                   # 0

        (wound
        bed)
		
		Day
                                                                                                                                   # 7

        (healed
        wound)
		
		Day
    # 10		
		Day
    # 14		
		Day
    # 28		
		Day
    # 91		
		Day
    # 182		
		Day
    # 365		
		Post
    1 year		

 

*
Punch biopsies will be obtained at scheduled time points, not to exceed a total of 6 healed wound samples nor 5% of the
healed graft.

    	64

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials			Pt.
    Reg. No.	CSS

 

Microbiology

		Site
    A	Site
    B
	Date:		Site:	Site:
	Day
    of Study:		Organism:	Organism:
	(recipient
    wound bed)		
		Site:	Site:
		Organism:	Organism:
	Date:		Site:	Site:
	Day
    of Study:		Organism:	Organism:
			
		Site:	Site:
		Organism:	Organism:
	Date:		Site:	Site:
	Day
    of Study:		Organism:	Organism:
			
		Site:	Site:
		Organism:	Organism:
	Date:		Site:	Site:
	Day
    of Study:		Organism:	Organism:
			
		Site:	Site:
		Organism:	Organism:
	Date:		Site:	Site:
	Day
    of Study:		Organism:	Organism:
			
		Site:	Site:
		Organism:	Organism:
	Date:		Site:	Site:
	Day
    of Study:		Organism:	Organism:
			
		Site:	Site:
		Organism:	Organism:
	Date:		Site:	Site:
	Day
    of Study:		Organism:	Organism:
			
		Site:	Site:
		Organism:	Organism:
	Date:		Site:	Site:
	Day
    of Study:		Organism:	Organism:
			
		Site:	Site:
		Organism:	Organism:
	 	 	 	 	 

 

*Note-
(S) Swab or (Q) Quantitative

(Required
Study Day #0, #7, #14)

    	65

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials			Pt.
    Reg. No.	CSS

 

Blood
Cultures

 

		Organisms
    Isolated
	Date:		
	Day
    of Study		Medication
    Treatment:
			Dates:
			
	Date:		
	Day
    of Study		Medication
    Treatment:
			Dates:
			
	Date:		
	Day
    of Study		Medication
    Treatment:
			Dates:
			
	Date:		
	Day
    of Study		Medication
    Treatment:
			Dates:
			
	 	 	 	 

 

Systemic
Antibiotic Therapy

 

	Dates	Medication
		
		
		
		
		
		
		
		

    	66

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials			Pt.
    Reg. No.	CSS

 

Photography
Log

 

	Date	Study
    Day	Site
    A	Site
    B	Photographers
    ID
		Day
                                                                                                                                   # 0

        Wound
        bed
			
		Day
                                                                                                                                   # 0

        Post
        graft
			
		Day
    #			
		Day
    # 5			
		Day
    # 7			
		Day
    #			
		Day
    #			
		Day
    # 10			
		Day
    #			
		Day
    #			
		Day
    # 14			
		Day
    #			
		Day
    #			
		Day
    # 28			
		Day
    #			
		Day
    #			
		Day
    # 91			
		Day
    #			
		Day
    #			
		Day
    # 182			
		Day
    #			
		Day
    #			
		Day
    # 365			
		Day
    #			
		Day
    #			

 

Form CSS
7.15

Revised:
October 2003

    	67

    	 

    

 

CULTURED
SKIN SUBSTITUTE

IRB
Protocol #95-7-26-1 (autologous CSS)

IDE
# G980023

 

	Patient
    Initials			Pt.
    Reg. No.	CSS

 

Site
Regrafting Log

 

	Regrafting
    Date	Site
    regrafted (CSS or AG)	POD
    of Site Regrafted	Graft
    type used for regrafting (CSS or AG)	Wound
    closure completed by POD 14
					
					
					
					
					
					
					
					
					
					

POD, post-operative
day

 

Form CSS
7.16

Revised:
October 2003

    	68

    	 

    

The
Journal of TRAUMA Injury, Infection, and Critical Care

Cultured
Skin Substitutes Reduce Requirements for Harvesting of Skin Autograft for Closure of Excised Full-Thickness Burns

Steven
T. Boyce, PhD, Richard J. Kagan, MD, David G. Greenhalgh, MD, PetraWarner, MD, Kevin P. Yakuboff, MD, TinaPalmieri, MD, and Glenn
D. Warden, MD

	Background:
                                                          Rapid and effective closure of full-thickness burn wounds remains alimiting factor in burns of greater than 50% of the total body
                                                          surface area (TBSA). Hypothetically, cultured skin substitutes (CSS) consisting of autologous cultured keratinocytes and fibroblasts
                                                          attached to collagen-based sponges may reduce requirements for donor skin, and morbidity from autograft harvesting and widely-meshed
                                                          skin grafts.

        Methods:
        To test this hypothesis, CSS were prepared from split-thickness skin biopsies collected after enrollment of 40 burn patients by
        informed consent into a study protocol approved by the local Institutional Review Boards of three participating hospitals. CSS
        and split-thickness skin autograft (AG) were applied in a
	matched-pair
                                                                      design to patients with full-thickness burns involving a mean value of 73.4% of the TBSA. Data collection consisted of photographs,
                                                                      are a measurements of donor skin and healed wounds after grafting, qualitative outcome by the Vancouver. Scale for burn scar,
                                                                      and biopsies of healed skin.

        Results:
        Engraftment at post operative day (POD) 14 was 81.5 2.1% for CSS and 94.7 2.0 for AG.Percentage TBSA closed at POD 28 was 20.5
        2.5% for CSS , and 52.1 2.0 for AG. Theratio of closed to donor areas at POD 28 was 66.2 8.4 for CSS, and 4.0 0.0 for each harvest
        of AG. Each of these values was significantly different between the graft types. Correlation of percent TBSA closed with CSS at
        POD 28 with percent TBSA.
	full-thickness
                                                          burn generated an r2 value of 0.37 (p < 0.0001).Vancouver Scale scores at 1 year after were not different for erythema, pliability,
                                                          or scarheight, but pigmentation remained deficient in CSS.

        Conclusions:
        These results demonstrate that CSS reduce requirements for donor skin harvesting for grafting of excised, full-thickness burns
        of greater than 50% TBSA with qualitative outcome that is comparable to meshed AG. Availability of CSS for treatment of extensive,
        deep burns may reduce time to wound closure, morbidity, and mortality in this patient population.

        KeyWords:
        Burns, Wound healing, Cultured skin, Skin grafts.

         

        JTrauma.
        2006;60:821–829.

	Permanent
    wound closure remains a limiting factor in recovery from extensive, full-thickness burn injuries. Recovery from massive burns
    requires complex critical care that includes, but is not limited to: resuscitation from burn shock, stable respiration, nutritional
    support of metabolic requirements, restoration of immune flll1ction, and management of microbial contamination and infection.
    However, recovery depends ultimately on closure of the wounds with autologous epidermis and connective tissue to provide stable
    healing with minimal amounts of scar. 1.2	Furthermore,
                                                                                  although wound closure is a requirement for discharge from the hospital, skin pliability and stability are essential for the recovery
                                                                                  of range of motion, 3-5 and contribute importantly to long-term quality of life.

        Because
        closure of excised, full-thickness burns is a definitive requirement for recovery, several alterative have been studied to accomplish
        more rapid wound closure. Cultured epithelial autografts applied as partially stratified, keratinocyte sheets have been studied
        extensively, but are reported to blister, ulcerate, and remain mechanically fragile due to poor foundation of basement membrane.6-7
        Cultured keratinocytes have also been applied by spraying of cell suspensions over an appropriate wound base, or a de1111al substitute,
        8-9 but the time to healing may be lengthy due to the slow organization of the cultured cell suspensions into stratified, keratinized
        epidermis. Replacement of dermal tissue has also been shown to reduce long-term morbidity from scarring. Dermal analogs from natural
        or engineered sources 10-15 have been reported to provide connective tissue beneath either skin epidermal autograft, or cultured
        keratinocytes. However, none of these alternatives compares favorably to unmeshed, split-thickness skin autograft, which has been
        reported to provide superior results in pediatric burns and grafting to the face or genitalia.15-17

	Submitted
                                                                      for publication March 10. 2005. Accepted for publication September 1,2005.

        Copyright
        {j 2006 l1y Lippincott Williams & Wilkins. Inc.

        From
        the Department of Surgery, University of Cincinnati and the Shriners Burn Hospital, Cincinnati. Ohio (S.T.B., RJ.K., P.W., K P.Y.,
        G.D. W.) and the Shriners Hospitals for Children Northern California, Sacramento. California (0.0.0., T.P.).

        Presented
        at the 2004 meeting of the American Burn Association. March 23-26. 2004, Vancouver, British Columbia, Canada.

        This
        study was supported by grants from the US Food and Drug Administration (FD-R-OOOti72), the National Institutes of Health (GM50509),
        and the Shriners Hospitals for Children (8670 and 8450).

        Address
        for reprints: Steven T. Boyce, PhD. Department of Surgery, University of Cincinnati. P.O. Box 670558, Cincinnati. OH 45267-0558;
        email: boyccst@uc.cdu.

	 	 	 	 

    	69

    	 

    

 

The Journal of TRAUMA Injury, Infection,
and Critical Care

	
        Previous reports from this laboratory have
        reported the design and testing of cultured skin substitutes (CSS) prepared from epidermal keratinocytes and dermal fibroblasts
        attached to collagen-glycosaminoglycan substrates.1R•19 The epidermal substitute stratifies and keratinizes in vitro to initiate
        formation of epidermal barrier.20•21 Proliferating keratinocytes attach directly to dermal fibroblasts on the surface of the
        biopolymer sponge and initiate development of a basement membrane, which inhibits blistering after healing. Climcal experience
        \vith this model has shown rapid healing of bums, surgical wounds, or chronic wounds, but pigmentation has been deficient.22-2(i
        Addition of cultured epidermal melanocytes in preclimcal models has restored skin color, and cultured microvascular endothelial
        cells have formed vascular analogs after grafting.27,2H The present study is a prepivotal investigation of autologous cultured
        skin substitutes to evaluate whether or not this device provides new medical benefits for treatment of burns of greater than 50%
        of the total body surface area (TBSA). In addition, the present study includes treatment of patients at a distant hospital and
        evaluates whether skin healed with CSS grows proportionally to the growth of pediatric patients.

        MATERIALS AND METHODS 

        This study was performed with permIssIOns from
        the Institutional Review Boards of thc University of Cincinnati and the Univcrsity of California Davis, and from the US Food and
        Drug Administration wldcr an Investigational Device Exemption (IDE) protocol. All patients were enrolled into the study by completion
        of Informed Consent forms.

        The study design consisted of a prospective,
        randomized, open-label, paired-site comparison of grafting of excised, full-thickness burns with CSS, and split-thickness skin
        autograft (AG). CSS was meshed at a ratio of 1 to 1.5 and not expanded, and AG was meshed and expanded between 1 to 1,5, and 1
        to 4. Application sitcs were paired by selecting adjacent, contra-lateral or anterior-posterior areas that required skin grafting.
        Two sites ("'-150 cm2 each) were randomized as "A" or "B" before the bcginning of the study. Site A was
        defined as the rightmost. uppermost, or frontmost of the pair, and site B as the leftmost, lowermost, or rearmost. Comparative
        grafting was performed in one procedure for each patient, If additional applications of CSS were performed, they were evaluated
        only for quantitative closure of wounds. If additional applications of AG were performed, they were not evaluated,23 The main hypotheses
        of the study were that CSS close greater areas of wound than AG per unit of skin autograft harvested and that CSS provide qualitative
        outcome that is not different from AG.

        Two data sets were collected to test these
        hypotheses.

        Quantitative measurements consisted of tracings
        and planimetry of skin biopsies from which CSS were generated and tracings of treated areas Oll postoperative days (POD) 14 and
        28. The tracings were measured for total area and wOlmd tracings were segmented into closed or open areas. Areas were expressed
        in

         
	
        square centimeters (cm1). Eleven tracings were
        also performed in nine patients at time points between 2 to 7 years after grafting to evaluate if there was any change of CSS area
        associated with the growth of pediatric patients. Differences in CSS area were compared by student's t test to changes in TBSA
        to determine whether CSS were growing proportionally to the individual. TBSA was calculated according to Mosteller,29 and percent
        burn by using the Lund-Browder formula.30 From the area tracings, the following calculations were performed:

        (1) Percent area closed at POD 14 and 28 =
        (closed area/total treated area) X 100

        (2) Ratio of closed:donor areas at POD 28 =
        area closed with CSS/donor area

        (3) Percent TBSA closed at POD 28 = (area closed
        with CSS/TBSA) X 100

        Engraftment was defined as the percent of the
        treated area that was closed at POD 14. For AG, the ratio of c1osedto-donor areas was assigned as the maximum value of 4 per harvest,
        and the percent TBSA closed was calculated as the percent TBSA full-thickness burn minus the percent TBSA closed with CSS. Multiple
        harvests of donor sites were considered independent events with each harvest of AG expanded by a factor of not greater than 4.

        Qualitative data were collected according to
        the Vancouver Scale for burn scar assessment31 with a minor modification. The scale for pigmentation in this study was: a = nonc,
        1 = hypopigmented, 2 = normal pigmentation, and 3 = hyperpigmented. The individual values for erythema, pigmentation, pliability,
        and scar height of the Vancouver Scale were added, and expressed as a composite score.

        Enrollment criteria included patients with
        greatcr than 50% TBSA full-thickness cutaneous bw·ns. Between February 1998 and December 2003. 70 patients were enrolled
        into the IDE protocol, of which 62 were acute burns. Of thosc 62, 49 were treated, of which five expired and four were excluded
        from evaluation (Table 1). Of the 40 patients evaluated, there were 26 males and 14 females. The age (mean :!:SEM) was 7.5 :!:
        0.9 years (range 0.6-17 years), the percent TBSA burns were 75.8 :!: [,7% (rangc 53-95%), and the percent TBSA full-thickness burns
        of 73.4 ::!: 2.2% (range 34-95%). The percent rBSA treated with CSS per patient of 27,8 :!: 3.1 % (range 5-88%), and the days to
        initial CSS treatment were 32,8 :!: I.I (range 24-56; Table 2). Tbirtyseven patients were treated at the Shriners Bums Hospital
        in Cincinnati, OH, and three at the Shriners Hospital for Children in Northem California (Sacramento, CA.

	
         

         

 

 

 

 

Table 1 Enrollment and Treatment Data

 

	Parameter	Enrolled	Treated
	Totals	70	49
	Survived	55	44
	Expired	15	5
	Excluded		9
	Evaluated		40

	

	70

    	 

    
	

Cultured
Skin Reduces Autograft Harvesting

	Table 2 Demographic Data of the Patient Population
	Parameter	Mean ± SEM	Range
	Age (years)	7.5 ±0.9	0.6-17
	Male/female	26/14	
	TBSA burn (%)	75.8 ± 1.7	53-95
	TSBA FT burn (%)	73.4 ± 2.2	34-95
	TSBA CSS/patient (%)	27.8 ± 3.1	5-88
	Days to first CSS	32.8 ± 1.1	24-56

 

	 Biopsy samples of split-thiclmess skin were collected as early as possible after injury, usually during the first week of the hospitalization. The absolute areas (en}) to be treated with CSS, and for CSS biopsy for each patient were estimated with the following formulae23: (4Al % TBSA eligible for ess = (% TBSA of full-thickness bumH40% TBSA treated with AG) (4B) Absolute area (cm2) to be treated with CSS = (% TBSA eligible for eSS) X TBSA (cm2) (5) Absolule area (em2) ofeSS biopsy = Absolute area (cm2) to be treated with ess X 0.01 Formula 4A assumed that about 40% TBSA would be treated with AG during the time of ess preparation. This assumption was based on performance of two skin grafting operations during about 4 weeks covering about 20% TBSA pcr operation. In cases of very extensivc bums (e.g., >80% TBSA), the value of 40% TBSA coverage with AG was revised downward upon the advice of the medical staff, with a consequent increase in biopsy area (Formula 5). Splitthickness skill samples for preparation of ess were collected with a dermatome set at a depth 01'0.010 to 0.012 inches and transferred to the laboratory for cell culture. Keratinocytes were isolated from epidermis; fibroblasts were isolated from dermis of each biopsy and placed into selective cell cultures as described previously"-I,32.33 in 5% eO,/95% air atmosphere with saturated humidity at 37°C. Du~ing primary culture, human keratinoeytes were incubated in coculture with lethally-irradiated murine 3T3 fibroblasts in semm-free medium. At near-confluencc of thc primaty eulturc, or tirst subculture, part of each population was eryopreserved by controlled-rate freezing and part was continued in culture. After sufficient populations of keratinocytes and fibroblasts were available, fibroblasts were harvested and inoculated at an approximate density of 3.75 to 5.0 X 105 cells/cm2 onto collagen-glycosaminoglycan substrates34 and incubated at least 18 hours to allow cell attachment. Next, keratinocytes were harvested and inoculated at an approximate density of 0.75 to 1.0 X 1Q(i cells/cm2, which was defined as incubation day 0 for CSS. ess were incubated at the air-liquid interface to stimulate keratinization and formation of epidermal barrier.21 ess were usually scheduled for surgical application on incubation days 10 to 14 ("-28-35 days after biopsy collection), subject to patient condition. In preparation for grafting, ess (approximately 36 cm2 each) were meshed at a ratio of I: 1.5, but not expanded, placed in petri dishes with 	
        sufficient medium to avoid desiccation,
        and transported to the operating roOlll. For patients treated in Sacramento, ess were packaged in sealed jars, imlllobilized with
        sterile gauze packing that was kept moist with irrigation solution (see below), and sent by express delivery for application in
        the operating room the following day. After initial training of staff at the distant hospital, CSS were delivered without the attendance
        of laboratory slaff en route. Typically, 600 to 1200 cm2 of ess were applied weekly at each operative procedure until
        wound closure was completed. Usually, multiple procedures for grafting of ess were required for each patient.

        Quality assurance standards were
        applied to ess before transfer to the operating room. Two parameters of assessment were evaluated: light microscopy by standard
        histology and surface hydration of the epithelium by surface electrical conductivity/impedanee.33 Histologic evaluations
        consisted of examination of 18 of 32 ess prepared for each surgical procedure. CSS epithelia were scored as excellent (well organized
        and keratinized epithelium), good (organized and stratified epithelium), fair (multilayered, continuous epithelium), or poor (discontinuous,
        hcterogcneous epithelium), and scores of excellent, good and fair were considered acceptable for transplantation. Epithelial surface
        hydration was measured with a Nova 9003 Dermal Phase Meter (DPM; Nova Technology Corporation, Portsmouth, NH), which reports a
        high value on a wet surface or a 1m:\' value on a dry surface. For clinical use, DPM values for each ess demonstrated a decrease
        in DPM values on two successive readings of 2 or more clays apart.

        Burn eschar was excised as early
        as possible after completion of resuscitation, and sites planned for treatment with CSS were covered with cadaveric allograft or
        the dermal replacement, Integra Dermal Regeneration Template (Integra LifeSciences Corp, Plainsboro, NJ).22,35 For excised bums
        covered with allograft, it was usually excised 1 day before grafting of ess and AG, and irrigated at alternating 2-hour intervals
        with 5% wt/vol solution of mafenide acetate in water, and a solution of 40 JLg/mL neomycin and 700 U/mL polymyxin B in saline,
        delivered through perforated red rubber catheters into bulky gauze. The following day, dressings were removed, hemostasis was obtained,
        and prepared wounds were irrigated with a solution of nutrients and antimicrobials. For excised bW'J1s covered with the dermal
        replacement, Integra Dern1al Regeneration Template, the outer silastie layer ,vas removed to expose the vascularized WOlU1d bed
        and prepared W01U1ds were irrigated as above. The irrigation solution consisted of a modified formulation of Dulbecco's Modified
        Eagle's nutrient medium that was supplemented with 5 I-tg/mL htunan recombinant insulin, 0.5 I-tg/mL hydrocortisone, 40 JLg/mL
        neomycin, 700 U/mL polymyxin B, 20 l-tg/mL mupirocin, 20 JLgil11L ciprolloxacin, and I I-tg/mL amphotericin B.36-38
        After irrigation of the prepared wound beds, ess were gralled using a backing of N-terface (Winfield Laboratories, Richardson,
        TX) dressing and stapled in place. Split-thickness AG, meshed at ratios between 1 to 1.5 and

	

	 

    	71

    	 

    

 

The
Journal of TRAUMA Injury, Infection, and Critical Care

	I
                                                                                  to 4 was expanded and stapled to wounds. CSS and AG were dressed with fine mesh gauze, and covered with bulky gauze containing
                                                                                  perforated red rubber catheters that were secured with Spandex (De Royal, Pmvell, TN) that was stretched to apply gentle pressure
                                                                                  and to immobilize the grafted sites. If CSS and AG were LUlller the same dressing, the irrigatiun solutiun fur CSS was used.

        Postoperatively,
        CSS were irrigated with the solution of nutrients and antimicrobials described above, at a dosage of 1 mL per c.m2
        CSS three times per day for 5 to 7 days. Dressing changes for CSS and AG were routinely performed on postoperative days (POD)
        2 and 5, and all staples and N-terface were removed on POD 5. CSS were treated with an ointment (NBN) consisting of equal parts
        NeoSporin (Pfizer; New York, NY), Bactroban (GlaxoSmithKline; London, UK), and Nystatin (Wyeth Pharmaceuticals; Madison. NJ),
        and covered with dry bulky gauze. Dry, keratinized areas were treated with Curci (Kao Brands Co .• Cinciru1ati, OH) lotion
        and wet areas were treated with NBN ointment on Adaptic (Johnson & Johnson; New Bruswick, NJ) until healing was complete.
        Daily dressing changes were performed from POD 6 to 7, after which dressings were changed t\.vice daily. If healing was not complete
        by POD 15, routine wound care for AG was performed on CSS sites. AG was usually irrigated for 5 days with alternating solutions
        of 5% wt/vol mafenide acetate in water and a solution of 40 J.Lg/mL neomycin and 700 U/mL polymyxin B in saline. Dry dressings
        for AG routinely consisted of Adaptic coated with an ointment consisting of either 3 parts bacitracin and 1 part silver sulfadiazine
        if no yeast species were cultured from the grafts, or equal parts silver sulfadiazine, bacitracin, and nystatin if yeast were
        cultured.

        Statistical
        Analvsis 

        Primary
        analyses of data were performed on POD 28 for quantitative and qualitative endpoints. and at 1 year ± 1 month for qualitative
        outcome. Qualitative data sets \vcre analyzcd for ovcrall significance by the Kruskal-Wallis test. If overall significance was
        found. then differences were subjected to Wilcoxon's rank sum test. Data from positive! negative scoring of site regrafting was
        subjected to Fischer's exact test. For the endpoint, ratio of closed-to-donor areas, which is defined in the IDE protocol as the
        primary medical benefit, a statistical power analysis was pertormed based on preliminary data. For an alpha value of 0.05, and
        beta values ranging from 0.95 to 0.80, tbe estimated size ofthe population to detem1ine a statistical difference between the CSS
        and AG treatments was 13-21 patients. For that endpoint. a single-value I test was applied to compare CSS to a maximum value of
        4 per harvest of AG. Values for expansion of AG were most often less than 3, but were not recorded for all AG applied to all patients
        in this study. Tllis statistical approach minimizes the benefit of CSS for tllis endpoirit, and therefore was considered the most
        conservative statistical analysis.
	RESULTS
                                                                      

        Figure
        I shows microscopic anatomy of AG (left panel) and CSS (right panel) before grafting. Both have dermal and epidermal components
        with a total thickness of less than 400 J.Lm. The dermal component of CSS consists of reticulations of collagen-glycosaminoglycan
        (GAG) biopolymer populated with cultured fibroblasts to which the epidermal component is attached biologically. The epidermal
        component consists of cultured keratinocytes that stratify and differentiate to form an analog of stratum corneum, which is a
        precursor of functional epidermal barrier. The CSS generally resemble the anatomy of splitthickness skin but lack blood vessels.
        Therefore, CSS develop vascular perfusion entirely by angiogenesis, rather than by inosculation of blood vessels in the wound
        to those in the graft as occurs in AG. Most CSS in this study were approximately 6 X 6 cm in area, but a limited number of CSS
        of larger area (-12 X 12 cm) were also applied.

        Surgical
        application and healing during the first year after surgery are shown in Figure 2. Not sUllJrisingly, it was found that overlapping
        of the edges of CSS suppressed formation of granulation tissue between grafts and reduced linear scars after healing. In this
        patient, CSS were applied over excised, full-thickness burns and accomplished more than 90% wound closure at POD 14. At POD 28,
        the closed wounds are stable and use of pressure garments was begun. The healed CSS was stable, pliable, and hypopigmented at
        POD 69 and remained pliable and hypopigmented at POD 479. By 1 year after grafting in this patient, the autograft had developed
        greater areas of hypertrophic scar than the CSS.

        Epithelial
        engraftment and wound closure at POD 14 (Fig. 3A) was 81.5% tor CSS compared with 94.7%, tor AU which was statistically
        significant (p < 0.05). A need tor regrafting of CSS (13 of 40) was observed, but not for AG (0 of 40). Nonetheless,
        the magnitude of regrafting was usually small and the quantitative closure of wounds was much greater for CSS than AU (Fig. 38).
        The ratio of closed wound area to donor skin area tor CSS was 66.2 versus a maximum of 4 per harvest of AG. This difference is
        highly significant (p < 0.0 I), represents a reduction of donor skin harvesting of more than an order of magnitude by
        use of CSS, and detines the medical benefit or this alternative therapy for burn pa-

         

	  
	Fig.
                                                          1. Histologic anatomy of split-thickness skin and cultured skin substitutes before Surgery. (A) Split-lhickness skin
                                                          has a fully keratinized epidermis and vascularized dermis. (B) Cultured skin substitute has partial keratinized epidermis and
                                                          dermal substitute without a vascular network. Scale bar = 0.1 mm. 

         

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Cultured
Skin Reduces Autograft Harvesting

	  	  
	Fig.
                                                          3. Engraftment and donor skin reduction. (A) Percentage areas (mean ± SEM) closed at POD 14 were 81.5 ± 2.1
                                                          for CSS and 94.7 ± 2.0 for A G. (B) Ratios of closed-to-donor areas at POD 28 were 66.2 ± 7.6 for CSS and 4.0 ±
                                                          0.0 for A G.

         

	cases,
                                                          emphasizing the therapeutic impact of this device in life-threatening burns. On averagc, ess covered 20.3% TBSA, and AG covered
                                                          52.5% (Fig. 4B).

         

        No
        differences in qualitative outcome between CSS and AG were found at I year after grafting (Fig. 5) according to ordinal scoring
        by the Vancouver Scale for scar assessment. Significant differences were found between ess and AG at time points of 6 months and
        earlier. Application of ess without the expanded mesh of AG generated a smoother surface and CSS were consistently hypopigmented.
        Both of these factors contributed to lower scores for ess before 6 months.

        Histologic
        anatomy of ess and AG is shown in figure 6. At 5 months after grafting, the epidermis had matured and remaincd stable and tightly-adhcred
        to conncetive tisslle. Neither healed AG (Fig. 6A) nor ess (Fig. 6B) developed glands or follicles. Vascularity had decreased
        and collagen distribution was orthogonal, not linear as in scar. The epidermal surface and dermal-epidermal junction remained
        relatively linear indicating the absence of rete peg formation. At 15 months after grafting, AG (Fig. 6C) had developed a well
        interdigitated dermal-epidermal junction, and CSS (Fig. 6D) showed a nonlinear busement membranc zone.

	Fig.
    2. Clinical observation and healing during the first postoperative year. (A) Surgical application of large (.wlid box) and small
    (dotted box) formats of cultured skin substitutes (CSS). (B) Postoperative day (POD) 14. (C) POD 28 shml's areas treated with
    split-thickness autograft or CSS. (D) POD 69. (E) POD 479. Scales in mm.	  
	tients.
                                                          This is the primary benefit that is reported to the US FDA for measurement of the efficacy of this device.

        A
        positive correlation was found between the percent TBSA of wound closure with ess at POD 28, and the percent TBSA full-thickness
        burn (Fig. 4A). Importantly, the range of percent TBSA closed extended to 60% or greater in selected
	Fin.
    4. Correlation of percent total body surface area (TBSA full-thickness burn and percent TBSA closed. (A) Positive correlation
    (r2 = 0.37. p < 0.0001) was detected between percent TBSA closed with CSS and percent TBSA burned. (B) TBSAs (mean ±
    SEM) closed at POD 28 were 20.3 ± 2.0 for CSS and 52.5 ±2.0 for AG

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The Journal of TRAUMA Injury, Infection,
and Critical Care

	
         

        Fig. 5. Modified Vancouver Scale of
        qualitative outcome. Cultured skin substitllles (CSS) have statistically lower scores than autograft (AG) during the first 6 months
        after grafting. By 1 year or longer after grafting, no differences are found in the Vancouver Score.
	  	 
	
        Fig. 7. Qualitative outcome in Sacramento,
        California, with CSS from Cincinnati, Ohio. A skin biopsy was harvested from this patient in Sacramento and sent by express delivery
        to Cincinnati. where CSS were prepared. They were returned to Sacramento where they were applied to a 4 year-old patiellt with
        85% TBSA burns. At POD 99, the healed skin from CSS on the anterior torso is smooth, soft, strong and hypopigmented. These results
        are directly comparable to treatments with CSS in Cincinnati and demonstrale feasibility for distribution of CSS within the continential
        United States.

         
	 
	
         

        Similar clinical results have been obtained
        with CSS treatment of patients at the Shriners Hospital for Children in Northern California. Figure 7 shows complete healing at
        POD 28 of thc anterior torso of paticnt 64 in Sacramento. These results demonstrate that autologous CSS can be prepared and delivered
        wlattended to hospitals in distant locations.

        Because this study was performed in a pediatric
        population. it was possible to follow the long-term outcome as the patients grew. Figure 8 shows anecdotal data from 11 measurements
        of ch:.ll1ge of ess area in nine patients, compared with im:reases of TBSA. ess area increased at least as much as TBSA (61. 7%,
        versus 50.5%) demonstrating that ess grew

         

        Fig. 6. Histologic
        anatomy of closed wounds. Autografi (A) and culturPllskin mh.l·titute (B) shfllvn ,; m(JI1th.~ ajter grafting. Autograft
        (C) and cultured skin substitute (D) shown 25 II/onths alier grqjiing. Both tissue sources have a mature epidermis, a Ivel/-vascularized
        dermis with orthogonal distributions of col/age/I, and lack epidermal adnexi. Scale har = n.} 11/111. 
	 
	
        proportionally with these children over 2 to
        7 years after treatment.

         

        DISCUSSION 

        Data from this study support the hypothesis
        that autologous CSS reduce harvesting of donor skin tor closUJe of burn injuries involving greater than 50(% TBSA. This reduction
        in donor site harvesting represents a new medical bene tit in the treatment of extensive, full-thickness burn injuries. The reduction
        in donor skin rcquirements implies reductions ill donor site morbidity, numbers of skin-grafting operations, and intensive care
        days, but those data were not collected in this smdy. The reduction in dOlior site harvesting is interpreted to result from qualitative
        and quantitative advantages provided by ess.

        Because the epithelium of ess torms partial
        balTier and basement membrane in vitro,20, 21 epithelial closure occurs rapidly after grafting. Effectively, the keratinized epithelium
        provides a biological closUJe to the wound at the time of grafting and the basement membrane anchors the epithelium to the connective
        tissue. Engraftment of ess occurs between connective tissue in the wound and in the graft in analogy to AG. Upon vascularization
        of the dem1al component of CSS, which occurs by POD 5, the ess begins to stabilize as barrier function and basement membrane are
        restored. By POD 7, engrafted CSS have closed the wounds with a pennanent.
	 

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Cultured Skin Reduces Autograft Harvesting

	  
	 Fig. 8. Increase in area of TBSA and CSS in pediatric patients. Serial examinations were performed over 2 to 7 years of 11 sites in nine patients. Left and center panels. patient 3 at age 3 and age 7 years. Increase of CSS area in these 11 sites averaged 61.7%. and increase of TBSA averaged 50.5% demonstrating that CSS grow proportionally with pediatric patients. Scale in cm. 
	
        natural tissue. By POD 14 (Fig. 28), healed
        ess has sufficient mechanical strength to allow physical therapy to begin. By POD 28, pressure gannellts, which help to control
        bum scar, can bc worn without loss of ess. Furthermore, application of CSS without expansion of the mesh that was used in AG may
        suppress the initiation of scar foundation. Unmeshed AG applied as sheet gralls on the hands and face has been reported to reduce
        scar formation and improve functional and cosmetic outcomes. 15, 39, 40 In tlus paticnt population, engraftment (Fig. 3A) was
        greater than 80% but remained statistically lower than AG. This difference introduced a requirement for nunor regrafting of CSS
        sites at a higher frequency than AG, despite a reduction in donor site harvesting.

        The primary medical benefit of CSS
        is defined by a ratio of closed areas to donor areas of greater than 65. This value was compared statistically to a maximum expansion
        of 1:4 for AG. but the actual cxpansion of AG was not measured in this study. In most cases, the usual expansion of AG was 1:2
        at the performance site in Cincinnati. Therefore, the conservation of donor skin with CSS compared with AG may actually have been
        as much as 30-fold. The factor of donor skin expansion of greater than 65-told by CSS suggests hypothetically that less than 2%
        TBSA of donor skin is sufficient to resurface the body completely with CSS. This benefit has been realized in selected cases of
        greater than 90% TBSA full-thickness burns, in which excised bums of greater than 50% TBSA were closed with CSS from a biopsy of
        less than 1% TBSA. In addition to reduction of donor skin harvesting, this conservation of donor skin offers a definitive benefit
        for closure of lite-threatening burns. Based on these selected cases, it may be possible that broad use of CSS could increase the
        LD50 for burns, which is estimated to be 70% to 80% TBSA in healthy adults, but is much lower in the elderly and the
        very young.36 The positive correlation of percent TBSA closed with CSS to percent TBSA full-fuickness bum demonstrates
        fuat ess remain effective even as the magnitude and complexity of the burn injury are at their greatest. This was shown not to
        be true for cultured epithelial auto grafts, in which effectiveness correlated inversely with burn magtutude.41

         
	
        Despite conservation of donor skin,
        less average area (20.3% TBSA) was covered with CSS than AG (52.5% TBSA). This apparent anomaly was attributed to greater frequencies
        of burns between 50% and 80% TBSA in which lower percent TBSA is treated with CSS, and limited capacity to generate the cultured
        grafts. Due to limited laboratory facilities, about 1000 cm2 of CSS was applied each week, which decreased the rate at which wounds
        were treated with CSS and allowed more grafting with AG. Nonetheless, the range of areas closed with CSS extended to about 70%
        TBSA. It was also observed that because of the sparing of donor skin by CSS, the mesh ratio tor AG for most cases could be reduced
        to 1:2 or less, compared with as much as 1 :4. This reduction of mesh ratio resulted in faster healing and less scarring of wounds
        closed with AG. This indirect benefit is also believed to contribute to improved functional outcome and long-term recovery.

        Qualitative outcome by a modified
        Vancouver Scale was not difterent between treatments at I year aner grafting. However, subjective differences between ess and AG
        can be accounted for by lower pigmentation and less raised scar in CSS. Reduced pigmentation is understood to result trom dilution
        of epidermal melanocytes during selective culture of keratinocytes, and poor survival during clyopreservation. 42 As discussed
        above, reduction in raised scar may result from application of CSS without expanded mesh and AG with expanded mesh. Histologic
        anatomy of healed CSS is consistent with the general process of scar maturation observed in AG. These results suggest that skin
        tissue generated from CSS is regulated by the same physiologic mechanisms of healing as AG. However, CSS respond somewhat differently
        than AG because of anatomic ditIerences such as fewer melanocytes and absence of a vascular plexus or immune cells at the time
        of grafting. Data for growth of CSS was collected anecdotally from a subset of paticnts after clinical examinations over several
        years. Proportional increases of areas of CSS and body surface area suggests normalization of tissue anatomy and physiology and
        limited scar formation in sites treated with CSS. Considerable effort was made during

         

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The
Journal of TRAUMA Injury, Infection, and Critical Care

	the
                                                                                                    development of surgical and nursing protocols to manage CSS as similarly as possible to AG. Therefore, training of the staff at
                                                                                                    the Sacramento Shriners Hospital consisted of one inservice before the initial application of ess and provision of detailed written
                                                                                                    protocols for postoperative care. Successful use of CSS with this limited training proviJes feasibility for performance of a multicenter
                                                                                                    study of this medical device which is required before premarket approval can be received.

         

        Remaining
        anatomic limitations of ess compared with AG include (but are not linlited to) hypopigmentation and absence of blood vessels,
        glands, or follicles. Operational limitations includc the timc to first application, compromise of tissue biopsies or CSS grafts
        during transport, microbial contamination in skin samples that may be carried into the cell cultures, or variability in materials
        used in CSS fabrication. Among these limitations, the time to first application may be reduced somewhat by more efficient culture
        processes. However, the delivery of a cultured graft with a keratinized epidermis, basement membrane, and dermal substitute requires
        time for these biological structures to form. The formation of these epidermal structures is required ultimately for stable wound
        closure and this model controls the formation of these struchlres in the laboratory rather than on the wound. Therefore, medical
        efficacy must consider not only time of preparation and delivery of a cultured cell graft to the patient, but also thc total timc
        to complete healing and the long-term outcome. Together, these operational limitations are expected to be reduced greatly as tlus
        technology moves from the research laboratory to a process of current good manufacturing practices for medical devices. If sufficient
        facilities were available and greater amounts of ess were generated, this therapeutic approach would allow coverage of wounds
        of virtually any magnitude in approximately 6 weeks after initiation of the process for CSS preparation. Hypopigmentation and
        lack of a vascular plexus have been addressed in preclinical studies from tlus laboratory.27, 28 Pigmentation has been regulatcd
        by the addition of epidermal melanocytes to ess and the addition of dermal microvascular cndothclial cclls has resulted in formation
        of vascular analogs that form tubular structures after grafting. Hypothetically, hair follicles and sweat and sebaceous glands
        may be regenerated in vitro, but accomplishment ofthese goals will require regulation of developmental signals in vitro, which
        is beyond the scope of the present studies. However, it is important to recognize that split-thickness skin AG also docs not regenerate
        glands or follicles. Therefore, regeneration of hair and/or glands in ess would offer anatomic stmetures found only in fullthickness
        skin.

        CSS
        has also been used successfully in treatment of congenital giant hairy nevus and postbum scar reconstmction. For these elective
        applications, the time of preparation docs not limit the time of recovery because there is not an emergent need for treatment.
        Also, if patients for bum scar reconstmction had been treated with CSS during their acute care hospitalization, then cryopreserved
        cells may be used to
	prepare
                                                                                                    CSS and eliminate the need for donor site harvesting for these procedmes. Together, these advantages offer new alternatives for
                                                                                                    reduced harvesting of donor skin to patients with needs for closure of extensive full-thickness burns or with lin1ited donor site
                                                                                                    availability for skin grafting. These therapeutic advantages may be realized for faster recovery with improved outcome for patient
                                                                                                    populations with burns, bum scars, chronic wounds, and congenital skin diseases.

         

        ACKNOWLEDGMENTS
        

        The
        authors grateflilly acknowledge the expert technical assistance of Todd Schuermann, Jodi !Vliller, Christopher Lloyd, lvlelissa
        Reed, Mary Rieman, Johanna Sanders, and Marybeth Lawless for assistance in performance of this study.

         

        REFERENCES
        

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        11.
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        12.
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        13.
        Rehder J, Souto LR, Bernardino CM,lssa M, Puzzi MH. Model of human epidermis rcconstructed in vitro with keratinoc.ytes and melanocytes
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        Chester DL, Balderson DS, Papini RP. A review of keratinocyte delivery to the wound bed. J Burn Care Rehabil. 2004;25:266-275.

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        Archer SB, Henke A, Greenhalgh DG, Wardell GO. The use of sheet auto grafts to cover extensive burns in patients. J Burn Care
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        Housinger TA, Keller B, Warden GD. Management of burns of the penis. J Burn Care Rehabil. 1993: 14:525-527.

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Cultured
Skin Reduces Autograft Harvesting

	18.
                                                                                                    Supp DM, Karpinski AC, Boyce ST. Expression of human beta-defensins HBD-1, HBD-2, and HBD-3 in cultured keratinocytes and skin
                                                                                                    substitutes. Burns. 2004;30:643-648.

        19.
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        20.
        Boyce ST, Supp AP, Harriger MD, Pickens WL, Wickett RR, Hoath SB. Surface electrical capacitance as a noninvasive index of epidermal
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        21.
        Boyce ST, Supp A P, Swope VB, Warden GD. Vitamin C regulates kcratinoeyte viability. epidermal barrier. and basement membrane
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        Boyce ST, Kagan RJ, Meyer NA, Yakuboff KP. Warden GO.

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        skin substitutes combined with Integra to replace native skin autograft: and allograli for c1osure of full-thickness burns.

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        J Tiss Cult Meth. 1985:9:83-93.

        33.
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        34.
        Boycc ST, Christianson DJ, Hansbrough .IF. Structure of a collagen-GAG dermal skin substitute optimized for cultured uuman epidermal
        keratinocytes.J Biomed Mater Res. 1988;22:939-957.

        35.
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        1988;208:313-:120.

        36.
        American Born Association. National Burn Repository: 2002 Report. Chicago: American Burn Association; 2002.

        37.
        Boyce ST, Wardcn GO, Holder IA. Non-cytotoxic combinations of topical antimicrobial agents for use with culturcd skin. Antimicrob
        Agents Chemother. 1995;39: 1324-1328.

        38.
        Boyce ST, Supp AP, Harriger MD, Greenhalgh DG, Warden GD. Topical nutrients prnmote engraftment and inhihit wound contraction
        of cultured skin substitutes in alhymic mice. J Burn Care Rehabil. 1995; 1 04:345-349.

        39.
        Warden GD, Same JR., Kravitz M. A two-stage technique for excision and grafting of burn wounds .J Trauma. 1982:22:98-103.

        40.
        Carsin H, Ainaud P, Le Bcvcr H, cl aJ. Cultured epithelial autografts in extcnsive burn coverage of severely traumatized patients:
        a live year single-center experience with 30 patients. Burns. 2000;26:379-387.

        41.
        Williamson J, Snelling C, Clugston P, MacDonald T, Germann E. Cultured epithelial autograft: Five years of clinical cxpcrience
        with twenty-eight paticnts J Trauma. 1995;39:309-319.

        42.
        Compton CC, Warland G, Kratz G. Mclanocytes in culrured epithelial autografts are depicted with serial subcultivatioo and cryoprescrvalion:
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    	77

    	 

    

SURVIVAL
OF BURNS INVOLVING 90% OF THE TOTAL BODY SURF ACE AREA AFTER TREATMENT WITH AUTOLOGOUS ENGINEERED SKIN SUBSTITUTES

Steven
Boyce, PhD* 1,2; Peggy Simpson, RN"; and Richard Kagan, MD1,2

Department
of Surgery, University of Cincinnati 1, P.O. Box 670558, Cincinnati, OH 45267-0558, Shriners Hospitals for Children - Cincinnati
Burns Hospital"; 3229 Burnet Avenue, Cincimmti, Ohio 45229 USA

	ABSTRACT

         

        Rapid
        and effective closure of full-thickness bum wounds remains a limiting factor for survival after bums involving most of the total
        body surface area (TBSA). Hypothetically, engineered skin substitutes (ESS) consisting of autologous cultured keratinocytes and
        fibroblasts attached to collagen-based sponges may reduce requirements for donor skin, numbers of grafting procedures, and time
        of intensive care during hospitalization. To demonstrate feasibility for this approach, ESS were prepared from split-thickness
        skin biopsies collected after enrollment of 2 burn patients by InfOlmed Consent into a study protocol approved by the local Institutional
        Review Board. Patient A was a 10 yearold male who sustained 94% TBSA burns, and patient B was a 2 year-old female who sustained
        90% TBSA burns. The injuries were all full-thickness, and occurred in separate building fires in 2007. ESS and split-thickness
        skin autograft (AG) were applied in a matched-pair design with each patient serving as their own control. Data collection consisted
        of photographs, area measurements of donor skin and healed wounds after grafting. Data are expressed below as: A) % area closed
        at post-operative day (POD) 14, B) %TBSA closed at POD 28, and C) ratio of closed to donor areas at POD 28. Patient A received
        12 applications of ESS over 4 months, and patient B received 6 applications of ESS over 3 months. Average % area closed (dry epithelium)
        at POD 14 was 72.4% for ESS and 96.9% for AG. Frequency of patiial regrafting was higher for ESS than for AG. Average %TBSA closed
        at POD 28 was 51.4% for ESS, and 40.6% for AG. The average ratio of closed wound area to donor skin area at POD 28 was 125.5 for
        ESS, compared to 4.0 for AG. ESS which was healed at POD 28 did not blister or ulcerate subsequently. Patients wore pressure garments
        over all treated areas. Pigmentation of areas treated with ESS was deficient, but pliability of healed skin was acceptable. These
        results demonstrate that ESS reduce requirements for donor skin harvesting for grafting of excised, full-thickness burns involving
        most of the TBSA. Availability of ESS for treatment of extensive, deep bums may reduce time to wound closure, morbidity and mortality
        in this patient population.
	1.
                                                                                                    INTRODUCTION

         

        Rapid
        and effective closure of full-thickness burn wowlds remains a limiting factor for survival after burns involving most of the total
        body surface area (TBSA). Hypothetically, engineered skin substitutes (ESS) consisting of autologous cultured keratinocytes and
        fibroblasts attached to collagen-based sponges may reduce requirements for donor skin, numbers of grafting procedures, and time
        of intensive care during hospitalization. Preclinical studies have shown that ESS (previously referred to as cultured skin substitutes,
        CSS) fonn partial epidermal bamer and basement membrane in vitro(Boyce et al. 2002b), and express angiogenic factors, including
        but not limited to Vascular Endothelial Growth Factor, basic Fibroblast Growth Factor and Transforming Growth Factor P-l (Supp
        et al. 2000;LePoole and Boyce 1999). After grafting to full-thickness wounds in athymic mice, ESS containing epidermal melanocytes
        restore skin pigmentation (Swope et al. 2006), or containing microvascular endothelial cells torm hwnan vascular analogs (Supp
        et al. 2002). Previous clinical studies with ESS have demonstrated a reduction in requirements tor halvesting of donor skin autograft
        in bums greater than 50% TBSA (Boyce et al. 2002a;Boyce et al. 2006), grafting of excised giant congenital melanocytic nevus (Passaretti
        et al. 2004), atld chronic wounds (Boyce et al. 1995a). Although several alternatives for treatment of extensive, deep burns have
        been reported (MacNeil 2007;Supp and Boyce 2005), closure of very large TBSA burns remains challenging during acute hospitalization,
        and can result in long-term morbidity from scars. In this sUldy, autologous ESS were compared with split-thickness, meshed skin
        autograft treatment of two pediatric patients with burns of 90% TBSA or greater, and evaluated qualitatively for formation of
        scar, and quantitatively for engraftment at post-operative day (POD) 14, for ratio of closed wound to donor skin areas at POD
        28, and for % TBSA closed with ESS or AG.

         

    	78

    	 

    

 

	Survival
    of Burns With Engineered Skin	Boyce
    et al, 2008
		
	2.
                                                                                        METHODS

        To
        demonstrate feasibility for this approach, ESS were prepared from split-thickness skin biopsies collected after enrollment of
        2 burn patients by Informed Consent into a study protocol approved by the local Institutional Review Board. Patient A was a 10
        year-old male who sustained 94% TBSA burns, and patient B was a 2 year-old female who sustained 90% TBSA burns. The injuries were
        all full-thickness, and occurred in separate building fires in 2007. ESS were prepared from autologous keratinocytes and fibroblasts
        which were isolated from split-thickness skin, culhlred, and cryopreserved for later use (Figure 1). Cells were combined with
        collagen-based sponges, and incubated at the air-liquid interface to promote formation of epidermal barrier (Figurc 2). ESS and
        split-thickness skin autograft (AG) were applied in a matched-pair design with each patient serving as their own control (Figure
        3). The first application of ESS was compared to AG for all end points, and subsequent applications of ESS were added to the first
        and quantify device efficacy. Data collection consisted of photographs, area measurements of donor skin and healed wounds at post
        operative days (POD) 14 and 28 after grafting, and healed tissue biopsies as available. Data are expressed below as mean values
        for these two subjects for: A) % area closed at post-operative day (POD) 14, B) %TBSA closed at POD 28, and C) ratio of closed
        to donor areas at POD 28. Due to the small sample size, no statistical analyses were perfornled.

        Prior
        to treatment with ESS, wounds were excised, and grafted with either meshed, allograft skin or Integra Dermal Regeneration Template.
        Two-stage grafting was performed in which the allograft or silicone layer of Integra was removed, and wounds were treated overnight
        at twohour intervals with alternating irrigations of 5% Sulfamylon solution and double antibiotic solution (200 U/mL polymyxin
        Band 40 jlg/mL neomycin) (Warden et al. 1982). The following morning, the dressings were removed in the operating room, hemostasis
        was obtained with electrocautery and compression. Autograft skin was harvested at a thickness of 0.010-0.012 inches thickness,
        and meshed and expanded 1:2. ESS were applied with a dressing of N- Terface, and AG was applied directly to the prepared wounds.
        Grafts were stapled to the wounds, dressed with fine-meshed gauze and bulky gauze with perforated red rubber catheters and secured
        either with a Spandex stent or with elastic wrap bandages. Sites were irrigated for five days with a formulation of non-cytotoxic
        antimicrobial agents (Boyce et al. 2006) at a dosage of ImL/cm2 three times per day. Dressings were changed on POD 2. On POD 5,
        wet dressings were discontinued, and all dressings and staples were removed. Open areas of ESS were dressed with a topical ointment
        consisting of equal parts Neospori..tl, Bactroban and Nystatin on Adaptic. Open areas of AG were dressed with a topical cream
        consisting of equal parts Silver sulfadiazine, Bacitracin and Nystatin on Adaptic. Keratinized areas of ESS were treated with

        Boyce
        et aI, 2008.
	moisturizing
                                                                                                                                   lotion (i.e., Curel) beginning at POD 11, and moisturizing cream (i.e., Eucerin) was applied to AG beginning at POD 7. 80th graft
                                                                                                                                   types were treated according to the AG protocol beginning at POD 15.

        3.
        RESULTS

        Patient
        A received 12 applications of ESS over 4 months, and patient B received 7 applications of ESS over 3 months. Average % engraftment
        (dry epithelium) at POD 14 was 72.4% for ESS and 96.9% for AG (Figure 4A). Partial regrafting was performed in 8 of 12 ESS sites
        (66%) for Patient A, and 4 of 7 ESS siles (57%) for Patient B. The average ratio of closed wound area to donor skin area at POD
        28 was 125.5 for ESS, compared to 4.0 for AG (Figure 4B). Average %T8SA closed at POD 28 was 51.4% for ESS, and 40.6% for AG (Figure
        4C). Physical therapy was resumed beginning at POD 7, and ESS which was healed at POD 28 did not blister or ulcerate subsequently.
        Patients wore pressure gannents over all treated areas. Pigmentation of areas treated with ESS was deficient, but pliability of
        healed skin was acceptable. Figure 5 shows images of Patient A at the time of hospital discharge, 187 days after tlte first treatment
        with autologous engineered skin.

        CONCLUSIONS

        These
        results demonstrate that ESS reduce requirements for donor skin harvesting for grafting of excised, fullthickness bums involving
        1110St of the TBSA. Survival of these two patients after treatment with ESS is consistent with previous fmdings that autologous
        engineered skin is associated with reduced harvesting of donor skin autograft (Boyce et al. 2006), and decreased mortality in
        matched patient populations (Armour et al. 2007). Availability of ESS for treatment of extensive, deep burns may reduce time to
        wound closure, morbidity and mortality in this patient population.

        ACKNOWLEDGEMENTS

        This
        study was supported by Shriners Hospitals for Children. The authors acknowledge the teclmical skills and expertise of Christopher
        Lloyd, Elizabeth Maier, Rachel Zimmemlan, Jill Pruszka, John Besse, and Deanna Leslie for delivery of this investigative device
        to assist the bum care team with the recovery of these patients.

         

    	79

    	 

    

 

	Survival
    of Burns With Engineered Skin	Boyce
    et al, 2008
		
	 

        Figure
        1. Diagram of the process for fabrication of engineered skin substitutes. A biopsy of split-thickness skin is harvested from an
        uninjured site, epidermal keratinocytes and dem1al fibroblasts are isolated, the cells are cultured to very large populations,
        harvested as cell suspensions, inoculated onto collagen-based sponges, incubated in contact with air to stimulated epidermal keratinization,
        and grafted to excised, full-thickness wounds. The entire process requires approximately 4 weeks.

	 

        Figure
        2. Microscopic and macroscopic anatomies of engineered skin substitutes (ESS). A) Populations of dermal fibroblasts cover the
        surface of the biopolymer, and are also distributed into its interior to fom1 the dermal substitute (d). Epidermal keratinocytes
        (e) attach to the fibroblasts, form partial basement membrane, stratify, and form partial epidermal barrier before grafting.
        The engineered skin is avascular and has a total thickness of approximately 0.3 m111. Scale bar = 0.1 mm. B) Macroscopic anatomy
        of ESS shows a uniform construct approximately 30cm2 which can be handled readily by a surgeon. Scale in cm.

    	80

    	 

    

 

 

	Survival
    of Burns With Engineered Skin	Boyce
    et al, 2008
	
        Figure
        3. Surgical application of engineered skin substitutes (ESS). Left panel) ESS were applied as meshed, non-expanded sheets, stapled
        to wounds and irrigated for 5 days with non-cytotoxic antimicrobial agents (Boyce et al. 1995b). Right panel) Grafting of the
        anterior torso of Patient A with ESS, and split-thickness skin autograft (AG). Integra Dermal Regeneration Template (Integra)
        was grafted previously. Scale in cm.

	
	  	
     
	Figure
    4. Quantitative comparisons of engineered skin substitutes (ESS) and split-thickness skin autograft (AG). A) Engraftment at post-operative
    day (POD14) 14 was 72.4% for ESS , and 96.9% for AG.  B)The ratios of closed wounds to biopsy area were 125.5 for ESS and
    4.0 for AG.  This value represents a reduction of donor skin requirements by treatment with ESS. C) Mean total body surface
    area (TBSA) closed with ESS was 51.4%, and with AG was 40.6%.

    	81

    	 

    

 

	Survival
    of Burns With Engineered Skin	Boyce
    et al, 2008
		
	Figure
                                                                                                    5. Patient A, healed ESS and AG at POD 187. Top panels) Torso and arms. Bottom panels) Legs. Wounds close rapidly because of epidermal
                                                                                                    keratinization ill vitro, and do not blister because of basement membrane formation. Pigmentation of most areas treated with ESS
                                                                                                    was deficient, but pliability of healed skin was acceptable. The patient wore pressure garments over all treated areas. Application
                                                                                                    as non-expanded sheets reduces granulation tissue and scar to generate a relatively smooth surface. Scale in em.

         

    	82

    	 

    

 

	Survival
    of Burns With Engineered Skin	Boyce
    et al, 2008
		
	REFERENCES

         

        Armour,
        A. D., B. A. DOff, R. 1. Kagan, and S. T. Boyce. Mortality of acute burns treated with cultured skin substitutes. J Blml Care
        Res 28[2J, S96. 2007.

         

        Boyce,
        S. T., R. Glatter, and W. 1. Kitzmiller. 1995a. "Treatment of chronic wounds with cultured cells and biopolymers: a pilot
        study." Wounds 7(1)24-9.

         

        Boyce,
        S. T., R . .T. Kagan, D. G. Greenhalgh, P. Warner, K. P. Yakuboff, T. Palmieri, and G. D. Warden. 2006. "Cultured skin substitutes
        reduce requirements for harvesting of skin autograft for closure of excised, full-thickness bums." Journal of Trauma 60821-9.

         

        Boyce,
        S. T., R. 1. Kagan, K. P. Yakuboff, N. A. Meyer, M. T. Rieman, D. G. Greenhalgh, and G. D. Warden. 2002a. "Cultured skin·
        substitutes reduce donor skin harvesting for closure of excised, fullthickness bums." Ann.Surg 235269-79.

         

        Boyce,
        S. T., A. P. Supp, V. B. Swope, and G. D. Warden. 2002b. "Vitamin C regulates keratinocyte viability, epidermal barrier,
        and basement membrane in vitro, and reduces wound contraction after grafting of cultured skin substitutes." Journal of Investigative
        Dermatology 118565-72.

         

        Boyce,
        S. T., G. D. Warden, and I. A. Holder. 1995b.

        "Non-cytotoxic
        combinations of topical antinlicrobial agents for use with cultured skin." Antimicrobial Agents and Chemotherapy 39(6) 1324-8.

         

        LePoole,
        I. C. and S. T. Boyce. 1999. "Keratinocytes suppress transforming growth factor beta-I expression by fibroblasts in cultured
        skin
	substitutes."
                                                          British Journal of Dermatology 140409-16.

         

        MacNeil,
        S. 2007. "Progress and opportunities for tissueengineered skin." Nature 445874-80.

         

        Passaretti,
        D., D. Billmire, R. Kagan, J. Corcoran, and S.

         

        Boyce.
        2004. "Autologous cultured skin substitutes conserve donor autograft in elective treatment of congenital giant melanocytic
        nevus." Plastic alld Reconstructive Surgely 1141523-8.

         

        Supp,
        D. M. and S. T. Boyce. 2005. "Engineered skin substitutes: practices and potentials. Clin.Dermata/23403-12.

         

        Supp,
        D. M., A. P. Supp, S. M. Bell, and S. T. Boyce. 2000. "Enhanced vascularization of cultured skin substitutes genetically
        modified to overexpress Vascular Endothelial Growth Factor." Journal of Investigative Dermatology 1145-13.

         

        Supp,
        D. M., K. Wilson-Landy, and S. T. Boyce. 2002. "Human dermal microvascular endothelial cells form vascular analogs in cultured
        skin substinltes after grafting to athyrnic mice." F ASEE Journal 16797-804.

         

        Swope,
        V. 8., A. P. Supp, S. Schwemberger, G. F.

        Babcock,
        and S. T. Boyce. 2006. "Increased expression of integrins and decreased apoptosis cOITelate with increased melanocyte retention
        in cultured skin substitutes." Pigment Cell Research 19424-33.

         

        Warden,
        G. D., 1. R. Saffle, and M. Kravitz. 1982. "A two-stage technique for excision and grafting of burn substitutes: practices
        and potentials."

        Clin.Dermata/23403-12.

 

    	83

    	 

    

Exhibit
D – The Amended and Restated Exclusive License Agreement between The Regents of the University of California and Cutanogen
Corporation.

    	84

    	 

    

AMENDED
AND RESTATED EXCLUSIVE LICENSE AGREEMENT

 

Between

 

THE
REGENTS OF THE UNIVERSITY OF CALIFORNIA

 

And

 

CUT
ANOGEN CORPORATION

 

For

 

LIVING
HUMAN SKIN REPLACEMENTS AND CULTURED SKIN SUBSTITUTES

 

UC
Case No. 86-323

    	85

    	 

    

TABLE OF
CONTENT

 

	Article
    No.	Title	Page
	BACKGROUND		1
	1.
     	DEFINITIONS	2
	2.
     	LIFE
    OF PATENT EXCLUSIVE GRANT	4
	3.
     	SUBLICENSES	5
	4.
     	PAYMENT
    TERMS	5
	5.
     	LICENSE-ISSUE
    FEE	7
	6.
     	LICENSE
    MAINTENANCE FEE	7
	7.
     	ROYALTIES,
    MINIMUM ANNUAL ROYALTIES AND MILESTONE PAYMENTS	7
	8.
     	DUE
    DILIGENCE	8
	9.
     	PROGRESS
    AND ROYALTY REPORTS	9
	10.
     	BOOKS
    AND RECORDS	10
	11.
     	LIFE
    OF THE AGREEMENT	11
	12.
     	TERMINATION
    BY THE REGENTS	11
	13.
     	TERMINATION
    BY LICENSEE	11
	14.
     	DISPOSITION
    OF LICENSED PRODUCT ON HAND UPON TERMINATION	12
	15.
     	USE
    OF NAMES AND TRADEMARKS	12
	16.
     	LIMITED
    WARRANTY	13
	17.
     	PATENT
    PROSECUTION AND MAINTENANCE	14
	18.
     	PATENT
    MARKING	15
	19.
     	PATENT
    INFRINGEMENT	16
	20.
     	INDEMNIFICATION	17
	21.
     	NOTICES	18
	22.
     	ASSIGNABILITY	19
	23.
     	NO
    WAIVER	19
	24.
     	FAILURE
    TO PERFORM	19
	25.
     	GOVERNING
    LA. WS	20
	26.
     	PREFERENCE
    FOR U.S. INDUSTRY	20
	27.
     	GOVERNMENT
    APPROVAL OR REGISTRATION	20
	28.
     	EXPORT
    CONTROL LA. WS	20
	29.
     	SECRECY	21
	30.
     	HUMANITARIAN
    DEVICE EXEMPTION	22
	31.
     	MISCELLANEOUS	23

 

    	86

    	 

    

DC Case
No(s). 86-323

 

AMENDED
AND RESTATED EXCLUSIVE LICENSE AGREEMENT

 

For

 

LIVING
HUMAN SKIN REPLACEMENTS AND

CULTURED
SKIN SUBSTITUTES

 

This
amended and restated exclusive license agreement (the "Agreement") is made effective this 3 day of March,
2001 (the "Effective Date"), between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, having its
statewide administrative offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200 (“The Regents”),
and CUTANOGEN CORPORATION, an Ohio corporation, having a principal place of business at 3130 Highland Avenue, Suite 3420, Cincinnati,
Ohio 45219-2374 (the “Licensee”).

 

BACKGROUND

 

A.
Certain inventions, generally characterized as Living Human Skin Replacements and Cultured Skin Substitutes (collectively the
"Invention"), were made in the course of research at the University of California, San Diego by Dr. Steven Boyce and
are covered by Regents' Patent Rights as defined below.

 

B.
The development of the Invention was sponsored by the Department of Health and Human Services and, as a consequence, this license
is subject to overriding obligations to the United States ("U.S.") Federal Government under 35 U.S.C. §§200-212
and applicable regulations including a non-exclusive, non-transferable, irrevocable, paid up license to practice

or
have practiced the Invention for or on behalf of the United States Government throughout the world.

    	87

    	 

    

 

C.
Licensee and The Regents executed an exclusive license agreement dated January 12, 1999 with DC. Control No. 99-04-0309 (the "First
Agreement"), a First Amendment (D.C. Control No. 99-04-0309A) dated August 26, 1999, and a Second Amendment (U.C. Control
No. 99-04-0309B) dated November 10, 1999. The parties now desire to amend and restate such First Agreement as set forth below.

 

D.
Licensee has evaluated the Invention under a Secrecy Agreement with The Regents (V.C. Control No. 97-20-0439) dated March 7, 1997.
In addition, Licensee and The Regents executed a Letter of Intent (V.C. Control No. 98-30-0494) dated March 30, 1998, and an Option
Agreement (D.C. Control No. 98-30-0494A) dated June 29, 1998. The Secrecy Agreement, Letter of Intent and Option Agreement were
terminated in the First Agreement.

 

E.
Licensee wishes to obtain rights from The Regents for the exclusive commercial development, use and sale of products from the
Invention, and The Regents is willing to grant those rights so that the Invention may be developed to its fullest and the benefits
enjoyed by the general public.

 

F.
Licensee is a "small business firm" as defined in 15 D.S.C. §632.

 

G.
Both parties recognize and agree that royalties due under this Agreement on products and methods will be paid by Licensee on both
pending patent applications and issued patents.

 

-00000-

 

In
view of the foregoing, the parties agree:

 

1.
DEFINITIONS

 

1.1
"Affiliate" means any corporation or other business entity in which Licensee owns or controls, directly or indirectly,
at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors or in which Licensee
is owned or controlled directly or indirectly by at least fifty percent (SO%) of the outstanding stock or other voting rights
entitled to

    	88

    	 

    

elect
directors; but in any country where the local law does not permit foreign equity participation of at least fifty percent (50%),
then an "Affiliate" includes any company in which Licensee owns or controls, or is owned or controlled by, directly
or indirectly, the maximum percentage of outstanding stock or voting rights permitted by local law.

 

1.2
"Field of Use" means use in connection with growth and maintenance of human skin cells and cell-biopolymer skin substitutes
for the treatment of bums, chronic or acute wounds, toxicology testing, skin research or pharmacokinetic research.

 

1.3
"Licensed Method" means any method that is covered by Regents' Patent Rights, or the use of which would constitute,
but for the license granted to Licensee under this Agreement, an infringement of any pending or issued claim within Regents' Patent
Rights.

 

1.4
"Licensed Product" means any material that is either covered by Regents' Patent Rights, that is produced by the Licensed
Method or that the use of which would constitute, but for the license granted to Licensee under this Agreement, an infringement
of any pending or issued claim within Regents' Patent Rights.

 

1.5
"Net Sales" means the total of the gross revenue received from Final Sale of Licensed Product to an independent, unaffiliated
third party or Licensed Method performed by Licensee, an Affiliate or a sublicensee, less the sum of the following actual and
customary deductions where applicable: cash, trade or quantity discounts; sales, use, tariff, import/export duties or other excise
taxes imposed on particular sales (excepting value added taxes or income taxes); transportation charges, including insurance;
and allowances or credits to customers because of rejections or returns. Final Sale means the sale which is the last act of infringement
of Regents' Patent Rights within the control of Licensee, an Affiliate or sublicensee, regardless of whether Licensee, an Affiliate
or sublicensee had control over prior infringing acts. For purposes of calculating Net Sales, any distribution or transfer among
Licensee, an Affiliate or sublicensee for end use by Licensee, an Affiliate or sublicensee (which event is the last act of infringement
of Regents' Patent Rights) will be considered a Final Sale at the price normally charged to independent, unaffiliated third parties.

 

1.6
"Regents' Patent Rights" means The Regents' interest in the following subject matter:

    	89

    	 

    

 

	DC
    Case Number	U.S.
    Application Number or	Filing
    or Issue Date
		U.S.
    Patent Number	
	86-323-1	Application
    No. 07/043,321, now abandoned	
	86-323-2	Application
    No. 07/186,603, now abandoned	
	86-323-3	Application
    No. 07/398,297, now abandoned	
	86-323-4	Application
    No. 07/437,883, now abandoned	
	86-323-5	Patent
    No. 5,273,900	12-28-93
	86-323-6	Application
    No. 07/759,637, now abandoned	
	86-323-7	Application
    No. 08/052,167, now abandoned	
	86-323-8	Patent
    No. 5,976,878	11-2-99
	86-323-9	Patent
    No. 5,711,172	1-27-98

 

and
continuing applications thereof including divisions and substitutions but excluding continuation-in-part applications (to the
extent that claims are not supported in the parent); any patents on said applications including reissues, reexaminations and extensions;
and any corresponding foreign applications or patents.

 

2.
LIFE OF PATENT EXCLUSIVE GRANT

 

2.1
Subject to the limitations set forth in this Agreement, The Regents grants to Licensee a world-wide license under Regents' Patent
Rights to make, have made, use, sell, offer to sell and import Licensed Product and to practice Licensed Method to the extent
permitted by law.

 

2.2
Except as otherwise provided in this Agreement, the license granted in Paragraph 2.1 is exclusive for the life of the Agreement.

 

2.3
The license granted in Paragraphs 2.1 and 2.2 is subject to all the applicable provisions of any license to the U.S. Government
executed by The Regents and is subject to the overriding obligations to the U.S. Government under 35 V.S.C. §§200-212
and applicable governmental implementing regulations.

 

2.4
The license granted in Paragraphs 2.1 and 2.2 is limited to methods and products that are within the Field or Use. For other methods
and products, Licensee has no license under this Agreement.

    	90

    	 

    

 

 

2.5
The Regents reserves the right to use the Invention and associated technology for educational and research purposes including
publication of research results and sharing such research results, the Invention and associated technology with other educational
and non-profit institutions for their use of similar scope.

 

3.
SUBLICENSES

 

3.1
The Regents also grants to Licensee the right to issue sublicenses to third parties to make, have made, use, sell, offer to sell
and import Licensed Product and to practice Licensed Method in the Field of Use, as long as Licensee has current exclusive rights
thereto under this Agreement. To the extent applicable, sublicenses must include all of the rights of and obligations due to The
Regents (and, if applicable. the U.S. Government) contained in this Agreement.

 

3.2
Licensee shall promptly provide The Regents with a copy of each sublicense issued, collect and guarantee payment of all payments
due The Regents from sublicensees and summarize and deliver all reports due The Regents from sublicensees.

 

3.3
Upon termination of this Agreement for any reason, The Regents, at its sole discretion, shall determine whether Licensee shall
cancel or assign to The Regents any and all sublicenses.

 

4.
PAYMENT TERMS

 

4.1
Paragraphs 1.3, 1.4 and 1.6 define Licensed Method, Licensed Product and Regents' Patent Rights, so that royalties are payable
on products and methods covered by both pending patent applications and issued patents. Royalties will be based on Net Sales and
will accrue in each country for the duration of Regents' Patent Rights in that country and are payable when revenue is received
from third party.

 

4.2
Licensee shall pay to The Regents earned royalties quarterly on or before February 28, May 31, August 31 and November 30 of each
calendar year. Each payment will be for earned royalties accrued within Licensee's most recently completed calendar quarter.

    	91

    	 

    

 

4.3
All monies due The Regents are payable in U.S. dollars. Licensee is responsible for all bank transfer charges. When Licensed Product
is sold for monies other than U.S. dollars, Licensee shall first determine the earned royalty in the currency of the country in
which Licensed Product was sold and then convert the amount into equivalent U.S. funds, using the exchange rate quoted in The
Wall Street Journal on the last business day of the reporting period.

 

4.4
Royalties earned on sales occurring in any country outside the U.S. may not be reduced by any taxes, fees or other charges imposed
by the government of such country on the payment of royalty income. Notwithstanding the foregoing, all payments made by Licensee
in fulfillment of The Regents' tax liability in any particular county will be credited against earned royalties or fees due The
Regents for that country.

 

4.5
If, at any time, legal restrictions prevent the prompt remittance of royalties by Licensee from any country where a Licensed Product
is sold, then Licensee shall convert the amount owed to The Regents into U.S. funds and shall pay The Regents directly from its
U.S. source of funds for as long as the legal restrictions apply.

 

4.6
If any patent or patent claim within Regents' Patent Rights is held invalid in a final decision by a court of competent jurisdiction
and last resort and from which no appeal has or can be taken, then all obligation to pay royalties based on that patent or claim
or any claim patentable indistinct therefrom will cease as of the date of final decision. Licensee will not, however, be relieved
from paying any royalties that accrued before the final decision or that are based on another patent or claim not involved in
the final decision or that are based on The Regents' property rights.

 

4.7
No royalties may be collected or paid on Licensed Product sold to the account of the U.S. Government, or any agency thereof, as
provided for in the license to the Government. 4.8 In the event payments, rebillings or fees are not received by The Regents when
due, Licensee shall pay to The Regents interest charges at a rate of ten percent (10%) per annum. Interest is calculated from
the date payment was due until actually received by The Regents.

    	92

    	 

    

5.
LICENSE-ISSUE FEE

Licensee
shall pay to The Regents a license-issue fee of five thousand dollars ($ 5,000) within seven (7) days after the Effective Date.
This fee is non-refundable, non-cancelable and is not an advance against royalties.

 

6.
LICENSE MAINTENANCE FEE

Licensee
shall also pay to The Regents a royalty in the form of a license maintenance fee of five thousand dollars ($5,000) beginning on
the one-year anniversary of the Effective Date and continuing annually on each anniversary of the Effective Date until and including
the fourth anniversary of the Effective Date. Beginning on the fifth anniversary of the Effective Date and continuing annually
on each anniversary of the Effective Date Licensee shall pay to The Regents a license maintenance fee of twenty thousand dollars
($20,000). The license maintenance fee is not due on any anniversary of the Effective Date if on that date, Licensee is commercially
selling Licensed Product and paying an earned royalty or minimum annual royalty to The Regents on the sales of Licensed Product.
License maintenance fees are non-refundable and not an advance against earned royalties.

 

7.
ROYALTIES, MINIMUM ANNUAL ROYALTIES and MILESTONE PAYMENTS

 

7.1
Licensee shall also pay. to The Regents an earned royalty of five percent (5%) of the Net Sales of Licensed Product or Licensed
Method. In the event that Licensee is required to pay royalties to any third party in order to commercialize Licensed Product,
the royalty paid by Licensee to The Regents may be decreased by an amount equal to one-half the royalties paid by Licensee to
such third party. However, in no event shall the earned royalty payable to The Regents by Licensee be less than three percent
(3%) of Net Sales of Licensed Product or Licensed Method.

 

7.2
Licensee shall pay to The Regents a minimum annual royalty of twenty thousand dollars ($20,000) for the life of Regents' Patent
Rights, beginning with the year of the first commercial sale of Licensed Product. Licensee's obligation to pay the minimum annual
royalty will be pro- rated for the number of months remaining in that calendar year when commercial sales commence and will be
due the following February 28, to allow for crediting of the pro-rated year's earned royalties. For subsequent years, the minimum
annual royalty will be paid to The Regents by February 28 of each year and will be credited against the earned royalty due for
the calendar year in which the minimum payment was made.

 

    	93

    	 

    

 

7.3
Licensee shall also pay to The Regents the following milestone payments on each Licensed Product within thirty (30) days of the
achievement of each milestone event by Licensee: 7.3.1 Fifty thousand dollars (S50,000) upon applying for marketing approval from
the United States Food and Drug Administration; and

 

7.3.2
One hundred thousand dollars ($100,000) upon receiving marketing approval from the United States Food and Drug Administration.

 

8.
DUE DILIGENCE

 

8.1
Licensee, upon execution of this Agreement, shall diligently proceed with the development, manufacture and sale of Licensed Product
and shall earnestly and diligently endeavor to market the same within a reasonable time after execution of this Agreement and
in quantities sufficient to meet market demands.

 

8.2
Licensee shall endeavor to obtain all necessary governmental approvals for the manufacture, use and sale of Licensed Product.

 

8.3
Licensee shall:

 

8.3.1
Complete a first round of equity financing of at least three hundred thousand dollars ($300,000) within four years of the Effective
Date;

 

8.3.2
submit a pre-marketing approval or other marketing approval application covering Licensed Product (the "Primary Application'')
to the U.S. Food and Drug Administration within four (4) years from the Effective Date;

 

8.3.3
market Licensed Product in the U.S. within six (6) months of receiving approval of the Primary Application from the U.S. Food
and Drug Administration. lfthe Primary Application is rejected (the "Rejection") or no approval is obtained within eighteen
(18) months of submission of the Primary

    	94

    	 

    

Application
then another application (the "Secondary Application") shall be submitted to the U.S. Food and Drug Administration within
six months of the Rejection or the end of the eighteen (18) month period, whichever is first; and

 

8.3.4
market Licensed Product in the U.S. within six months of receiving approval of the Secondary Application from the U.S. Food and
Drug Administration if it is necessary to submit a Secondary Application; and

 

8.3.5
receive approval from the U.S. Food and Drug Administration for either the Primary Application or the Secondary Application within
five years from the date of submitting the Primary Application; and

 

8.3.6
reasonably fill the market demand for Licensed Product following commencement of marketing at any time during the exclusive period
of this Agreement.

 

8.4
If Licensee is unable to perform any of the above provisions, then The Regents has the right and option to either terminate this
Agreement or reduce Licensee's exclusive license to a nonexclusive license. This right, if exercised by The Regents, supersedes
the rights granted in Article 2 (Life of Patent Exclusive Grant).

 

9.
PROGRESS AND ROYALTY REPORTS

 

9.1
Beginning March 31, 2001 and semi-annually thereafter, Licensee shall submit to The Regents a written progress report covering
Licensee's (and any Affiliate's or sublicensee's) activities related to the development and testing of all Licensed Product and
the obtaining of the governmental approvals necessary for marketing. Progress reports are required for each Licensed Product until
the first commercial sale of that Licensed Product occurs in the U.S. and shall be again required if commercial sales of such
Licensed Product are suspended or discontinued. The Regents shall safeguard progress reports with the same degree of care as it
exercises with its own data of a similar nature.

    	95

    	 

    

 

9.2
Progress reports submitted under Paragraph 9.1 shall include, but are not limited to, the following topics:

-
summary of work completed;

-
summary of work in progress;

-
current schedule of anticipated events or milestones;

-
market plans for introduction of Licensed Product; and

-
a summary of resources (dollar value) spent in the reporting period.

 

9.3
Licensee has a continuing responsibility to keep The Regents informed of the large or small business entity status (as defined
by the U.S. Patent and Trademark Office) of itself and its sublicensees and Affiliates.

 

9.4
Licensee shall report to The Regents in its immediately subsequent progress and royalty report the date of first commercial sale
of a Licensed Product in each country.

 

9.5
After the first commercial sale of a Licensed Product anywhere in the world, Licensee shall make quarterly royalty reports to
The Regents on or before each February 28 (for the quarter ending December 31), May 31 (for the quarter ending March 31), August
31 (for the quarter ending June 30 and November 30 (for the quarter ending September 30) of each year. Each royalty report will
cover Licensee's most recently completed calendar quarter and will show (a) the gross sales and Net Sales of Licensed Product
sold during the most recently completed calendar quarter; (b) the number of each type of Licensed Product sold; (c) the royalties,
in U.S. dollars, payable with respect to sales of Licensed Product; (d) the method used to calculate the royalty; and (e) the
exchange rates used.

 

9.6
If no sales of Licensed Product have been made during any reporting period, then a statement to this effect is required.

 

10.
BOOKS AND RECORDS

 

10.1
Licensee shall keep accurate books and records showing all Licensed Product manufactured, used and/or sold under the terms of
this Agreement. Books and records must be preserved for at least five (5) years from the date of the royalty payment to which
they pertain.

 

10.2
Books and records must be open to inspection by representatives or agents of The Regents at reasonable times. The Regents shall
bear the fees and expenses of examination but if an error in royalties of more than five percent (5%) of the total royalties due
for any year is discovered in any examination, then Licensee shall bear the fees and expenses of that examination.

    	96

    	 

    

 

11.
LIFE OF THE AGREEMENT

 

11.1
Unless otherwise terminated by operation of law or by acts of the parties in accordance with the terms of this Agreement, this
Agreement will be in force from the Effective Date until the date of expiration of the last-to-expire patent licensed under this
Agreement; or until the last patent application licensed under this Agreement is abandoned and no patent in Regents' Patent Rights
ever issues.

 

11.2
Any termination of this Agreement will not affect the rights and obligations set forth in the following Articles:

 

Article
10- Books and Records

Article
14- Disposition of Licensed Product on Hand Upon Termination

Article
15- Use of Names and Trademarks

Article
20- Indemnification

Article
24- Failure to Perform

Article
29- Secrecy

 

12. TERMINATION
BY THE REGENTS

 

If
Licensee fails to perform or violates any term of this Agreement, then The Regents may give written notice of default ("Notice
of Default") to Licensee. If Licensee fails to repair the default within sixty (60) days of the effective date of Notice
of Default, then The Regents may terminate this Agreement and its licenses by a second written notice ("Notice of Termination").
If a Notice of Termination is sent to Licensee, then this Agreement will automatically terminate on the effective date of that
notice. Such termination will not relieve Licensee of its obligation to pay any fees owing at the time of termination and will
not impair any accrued right of The Regents. These notices are subject to Article 21 (Notices).

 

13. TERMINATION
BY LICENSEE

 

13.1 Licensee
has the right at any time to terminate this Agreement in whole or as to any portion of Regents' Patent Rights by giving notice
in writing to The Regents. Such notice of termination will be subject to Article 21 (Notices) and termination of this Agreement
will be effective sixty (60) days from the effective date of such notice.

    	97

    	 

    

 

13.2
Any termination under the above Paragraph 13.1 does not relieve Licensee of any obligation or liability accrued under this Agreement
prior to termination or rescind any payment made to The Regents or anything done by Licensee prior to the time termination becomes
effective. Termination does not affect in any manner any rights of The Regents arising under this Agreement prior to termination.

 

14.
DISPOSITION OF LICENSED PRODUCT ON HAND UPON TERMINATION

Upon
termination of this Agreement, Licensee is entitled to dispose of all previously made or partially made Licensed Product, but
no more, within a period of one (1) year provided that the sale of Licensed Product is subject to the terms of this Agreement,
including, but not limited to, the rendering of reports and payment of royalties required under this Agreement.

 

15.
USE OF NAMES AND TRADEMARKS

 

15.1
Nothing contained in this Agreement confers any right to use in advertising, publicity or other promotional activities any name,
trade name, trademark or other designation of either party hereto (including contraction, abbreviation or simulation of any of
the foregoing). Unless required by law, the use by Licensee of the name "The Regents of the University of California or the
name of any campus of the University of California is prohibited.

 

15.2
The Regents is free to release to the inventors and senior administrators employed by The Regents the terms and conditions of
this Agreement. If such release is made, then The Regents shall give notice of the confidential nature and shall request that
the recipient does not disclose such terms and conditions to others. If a third party inquires whether a license to Regents' Patent
Rights is available, then The Regents may disclose the existence of this Agreement and the extent of the grant in Article 2 (Life
of Patent Exclusive Grant) to such third party, but will not disclose the name of Licensee or any other terms or conditions of
this

    	98

    	 

    

Agreement,
except where The Regents is required to release information under either the California Public Records Act, a governmental audit
requirement, or other applicable law.

 

LIMITED
WARRANTY

 

16.1
The Regents warrants to Licensee that it has the lawful right to grant this license.

 

16.2
This license and the associated Invention are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY THAT LICENSED PRODUCT OR LICENSED METHOD
WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.

 

16.3
IN NO EVENT MAY THE REGENTS BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE
OR THE USE OF THE INVENTION OR LICENSED PRODUCT.

 

16.4
This Agreement does not:

 

16.4.1
express or imply a warranty or representation as to the validity or scope of any of Regents' Patent Rights;

 

16.4.2
express or imply a warranty or representation that anything made, used, sold, offered for sale or imported or otherwise disposed
of under any license granted in this Agreement is or will be free from infringement of patents of third parties;

 

16.4.3
obligate The Regents to bring or prosecute actions or suits against third parties for patent infringement except as provided in
Article 19 (patent Infringement);

 

16.4.4
confer by implication, estoppel or otherwise any license or rights under any patents of The Regents other than Regents' Patent
Rights as defined in this Agreement, regardless of whether those patents are dominant or subordinate to Regents' Patent Rights;
or

 

16.4.5
obligate The Regents to furnish any know-how not provided in Regents' Patent Rights.

    	99

    	 

    

PATENT
PROSECUTION AND MAINTENANCE

 

17.1
As long as Licensee has paid patent costs as provided for in this Article 17 (Patent Prosecution and Maintenance), The Regents
shall diligently endeavor to prosecute and maintain the U.S. and foreign patents comprising Regents' Patent Rights using counsel
of its choice, and The Regents shall provide Licensee with copies of all relevant documentation so that Licensee may be informed
of the continuing prosecution, and Licensee agrees to keep this documentation confidential. The Regents' counsel will take instructions
only from The Regents, and all patents and patent applications under this Agreement will be assigned solely to The Regents.

 

17.2
The Regents shall use reasonable efforts to amend any patent application to include claims reasonably requested by Licensee to
protect the products contemplated to be sold under this Agreement.

 

17.3
Licensee shall apply for an extension of the term of any patent included within Regents' Patent Rights if appropriate under the
Drug Price Competition and Patent Term Restoration Act of 1984 andlor European, Japanese and other foreign counterparts of this
Law. Licensee shall prepare all documents and The Regents agrees to execute the documents and to take additional action as Licensee
reasonably requests in connection therewith.

 

17.4
If either party (in the case of The Regents, the Licensing Officer responsible for administration of this Agreement) receives
notice pertaining to infringement or potential infringement of any issued patent included within Regents' Patent Rights under
the Drug Price Competition and Patent Term Restoration Act of 1984 (andlor foreign counterparts of this Law), then that party
shall notify the other party within ten (10) days after receipt of notice of infringement.

 

17.5
Licensee shall bear the costs of preparing, filing, prosecuting and maintaining all U.S. and foreign patent applications contemplated
by this Agreement. Costs billed by The Regents' counsel will be rebilled to Licensee and are due within thirty (30) days of rebilling
by The Regents. These costs include patent prosecution costs for the Invention incurred by The Regents prior to the execution
of this Agreement and any patent prosecution costs that maybe incurred

for
patentability opinions, re-examination, re-issue, interferences or inventorship determinations. Costs incurred by The Regents
prior to the Effective Date of this Agreement are estimated to be approximately $161,152.90 (actual costs of approximately $204,994.38
less third party reimbursements of approximately $43,841.48) and will be reimbursed by Licensee in three equal annual installments
beginning on the fourth anniversary of the effective date of this Agreement and continuing annually for the next two successive
anniversaries of the effective date.

    	100

    	 

    

 

17.6
Licensee may request The Regents to obtain patent protection on the Invention in foreign countries if available and if Licensee
so desires. Licensee shall notify The Regents of its decision to obtain or maintain foreign patents not less than sixty (60) days
prior to the deadline for any payment, filing or action to be taken in connection therewith. This notice concerning foreign filing
must be in writing, must identify the countries desired and must reaffirm Licensee's obligation to underwrite the costs thereof.
The absence of such a notice from Licensee to The Regents will be considered an election not to obtain or maintain foreign rights.

 

17.7
Licensee's obligation to underwrite and to pay patent prosecution costs will continue for so long as this Agreement remains in
effect, but Licensee may terminate its obligations with respect to any given patent application or patent upon three (3) months'
written notice to The Regents. The Regents will use its best efforts to curtail patent costs when a notice of termination is received
from Licensee. The Regents may prosecute and maintain such application(s) or patent(s) at its sole discretion and expense, but
Licensee will have no further right or licenses thereunder. Non-payment of patent costs maybe deemed by The Regents as an election
by Licensee not to maintain application(s) or patent(s).

 

17.8
The Regents may file, prosecute or maintain patent applications at its own expense in any country in which Licensee has not elected
to file, prosecute or maintain patent applications in accordance with this Article 17 (patent Prosecution and Maintenance) and
those applications and resultant patents will not be subject to this Agreement.

 

18.
PATENT MARKING

Licensee
shall mark all Licensed Product made, used or sold under the terms of this Agreement, or their containers, in accordance with
the applicable patent marking laws.

    	101

    	 

    

 

PATENT
INFRINGEMENT

 

19.1
If Licensee learns of the substantial infringement of any patent licensed under this Agreement, then Licensee shall call The Regents'
attention thereto in writing and provide The Regents with reasonable evidence of infringement. Neither party will notify a third
party of the infringement of any of Regents' Patent Rights without first obtaining consent of the other party, which consent will
not be unreasonably denied. Both parties shall use their best efforts in cooperation with each other to terminate infringement
without litigation.

 

19.2
Licensee may request that The Regents take legal action against the infringement of Regents' Patent Rights. Such request must
be in writing and must include reasonable evidence of infringement and damages to Licensee. If the infringing activity has not
abated within ninety (90) days following the effective date of request, then The Regents has the right to:

 

19.2.1
commence suit on its own account; or 19.2.2 refuse to participate in the suit, and

The
Regents shall give notice of its election in writing to Licensee by the end of the one-hundredth (100th) day after receiving notice
of written request from Licensee. Licensee may thereafter bring suit for patent infringement, at its own expense, if and only
if The Regents elects not to commence suit and if the infringement occurred during the period and in a jurisdiction where Licensee
had exclusive rights under this Agreement. If, however, Licensee elects to bring suit in accordance with this Paragraph 19.2,
then The Regents may thereafter join that suit at its own expense. Licensee agrees not to bring suit for patent infringement without
following the procedures of this Paragraph, and both parties agree to be bound by an order of a court for patent infringement
issues and patent infringement defenses raised through the pendency of such a suit under this Paragraph 19.2.

 

19.3
Legal action, as is decided on, will be at the expense of the party bringing suit and all damages recovered thereby will belong
to the party bringing suit, but legal action brought jointly by The Regents and Licensee and fully participated in by both will
be at the joint expense of the

    	102

    	 

    

parties
and all recoveries will be shared jointly by them in proportion to the share of expense paid by each party.

 

19.4 Each
party shall cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party bringing suit.
Litigation will be controlled by the party bringing the suit, except that The Regents may be represented by counsel of its choice
in any suit brought by Licensee.

 

20. INDEMNIFICATION

 

20.1 Licensee
shall indemnify, hold harmless and defend The Regents, its officers, employees and agents, the sponsors of the research that led
to the Invention and the inventors of the patents and patent applications in Regents' Patent Rights and their employers against
any and all claims, suits, losses, liabilities, damages, costs, fees and expenses resulting from or arising out of exercise of
this license or any sublicense. This indemnification includes, but is not limited to, any product liability.

 

20.2 Licensee,
at its sole cost and expense, shall insure its activities in connection with the work under this Agreement and obtain, keep in
force and maintain insurance as follows or an equivalent program of self-insurance (including all Affiliates and sublicensees,
if any):

 

20.3 The
Licensee shall obtain Comprehensive or commercial form general liability insurance (contractual liability included) with limits
as follows:

- Each Occurrence
$5,000,000

-Products/Completed
Operations Aggregate $5,000,000

-Personal
and Advertising Injury $1,000,000

-General
Aggregate (commercial form only) $5,000,000

 

The coverage
and limits referred to under the above do not in any way limit the liability of Licensee. Licensee shall furnish The Regents with
certificates of insurance showing compliance with all requirements. Certificates must:

 

-Provide
for thirty (30) days' advance written notice to The Regents of any modification;

-Indicate
that The Regents has been endorsed as an additional Insured under the coverage referred to under the above;

    	103

    	 

    

Include
a provision that the coverage will be primary and will not participate with nor will be excess over any valid and collectable
insurance or program of self-insurance carried or maintained by The Regents.

 

20.4 If
Licensee is not exercising its right to make, have made, use, sell, offer to sell and import Licensed Product or practicing Licensed
Method then Licensee may obtain and carry insurance with a lower coverage level for individual event and aggregate coverage. Licensee
must notify The Regents before proceeding to obtain the lower coverage level. Such notification will be given to The Regents 30
days before such action is taken. Licensee shall obtain and carry coverage at the higher level as provided for in Paragraph 20.3
sixty (60) days before exercising its right to make, have made, use, sell, offer to sell and import Licensed Product or practicing
Licensed Method, and shall provide The Regents with a notice of intent to obtain coverage at the higher level sixty days before
coverage begins. The lower level of insurance will afford no less than the following coverage:

 

Each Occurrence
$1,000,000

Products/Completed
Operations Aggregate $5,000,000 Personal and Advertising Injury $1,000,000

General
Aggregate (commercial form only) $1,000,000

 

20.5 The
Regents shall notify Licensee in writing of any claim or suit brought against The Regents in respect of which The Regents intends
to invoke the provisions of this Article 20 (Indemnification). Licensee shall keep The Regents informed on a current basis of
its defense of any claims under this Article 20 (Indemnification).

 

NOTICES

 

21.1 Any
notice or payment required to be given to either party shall be deemed to have been properly given and to be effective as of the
date specified below if delivered to the respective address given below or to another address as designated by written notice
given to the other party:

 

21.1.1 on
the date of delivery if delivered in person;

    	104

    	 

    

21.1.2 on
the date of mailing if mailed by first-class certified mail, postage paid; or

 

21. 1.3
on the date of mailing if mailed by any global express carrier service that requires recipient to sign the documents demonstrating
the delivery of such notice or payment.

 

	In
    the case of Licensee:	CUT
                                                                      ANOGEN CORPORATION

        3130
        Highland Ave., Suite 3420

        Cincinnati,
        Ohio 45219-2374

        Attention:
        Steven T. Boyce

        President

         

	In
    the case of The Regents:	THE
                                                          REGENTS OF THE UNIVERSITY

        OF
        CALIFORNIA

        Office
        of Technology Transfer

        1111
        Franklin Street, 51b Floor

        Oakland,
        CA 94607-5200

        Attention:
        Executive Director

        Research
        Administration and

        Technology
        Transfer

        RE:
        UC Case No. 86-323-2,5,6,8,9

    	105

    	 

    

 

22. ASSIGNABILITY

This Agreement
may be assigned by The Regents, but is personal to Licensee and assignable by Licensee only with the written consent of The Regents,
which consent will not be unreasonably withheld.

 

23. NO WAIVER

No waiver
by either party of any default of this Agreement may be deemed a waiver of any subsequent or similar default. A suspension of
duty under this Agreement due to force majeure shall not be for a period longer than one (1) year.

 

24. FAILURE
TO PERFORM

If either
party finds it necessary to undertake legal action against the other on account of

failure
of performance due under this Agreement, then the prevailing party is entitled to reasonable attorney's fees in addition to costs
and necessary disbursements.

    	106

    	 

    

 

25. GOVERNING
LAWS

THIS AGREEMENT
WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICT OF LAWS OR
TO WHICH PARTY DRAFTED PARTICULAR PROVISIONS OF THIS AGREEMENT, but the scope and validity of any patent or patent application
will be governed by the applicable laws of the country of the patent or patent application. Disputes between the parties regarding
this Agreement will utilize only trial courts within California for disputes that go to court.

 

26. PREFERENCE
FOR U.S. INDUSTRY

Because
this Agreement grants the exclusive right to use or sell the Invention in the U.S., Licensee agrees that any products sold in
the U.S. embodying this Invention or produced through the use thereof will be manufactured substantially in the U.S.

 

27. GOVERNMENT
APPROVAL OR REGISTRATION

Licensee
shall notify The Regents if it becomes aware that this Agreement is subject to any U.S. or foreign government reporting or approval
requirement. Licensee shall make all necessary filings and pay all costs including fees, penalties and all other out-or-pocket
costs associated with such reporting or approval process.

 

28. EXPORT
CONTROL LAWS

Licensee
shall observe all applicable U.S. and foreign laws with respect to the transfer of Licensed Product and related technical data
to foreign countries, including, without limitation, the International Traffic in Arms Regulations (IT AR) and the Export Administration
Regulations.

    	107

    	 

    

 

29. SECRECY

 

29.1 With
regard to confidential information ("Data"), which can be oral or written or both, received from The Regents regarding
this Invention, Licensee agrees:

 

29.1.1 not
to use the Data except for the sole purpose of performing under the terms of this Agreement;

 

29.1.2 to
safeguard Data against disclosure to others with the same degree of care as it exercises with its own data of a similar nature;

 

29.1.3 not
to disclose Data to others (except to its employees, agents or consultants who are bound to Licensee by a like obligation of confidentiality)
without the express written permission of The Regents, except that Licensee is not prevented from using or disclosing any of the
Data that:

 

29.1.3.1
Licensee can demonstrate by written records was previously known to it;

 

29.1.3.2
is now or becomes in the future, public knowledge other than through acts or omissions of Licensee; or

 

29.1.3.3
is lawfully obtained by Licensee from sources independent of The Regents;

 

29.1.3.4
is required to be disclosed to a governmental entity or agency in connection with seeking any governmental or regulatory approval,
or pursuant to the lawful requirement or request of a governmental entity or agency; and

 

29.1.4 that
the secrecy obligations of Licensee with respect to Data will continue for a period ending five (5) years from the termination
date of this Agreement.

 

29.2 Upon
the termination of this Agreement, Licensee must destroy or return to The Regents any Data in its possession within thirty (30)
days following the effective date of termination. However, Licensee may retain one copy of Data solely for archival purposes,
provided that such Data is subject to the confidentiality provisions set forth in this Article 29 (Secrecy). Within sixty (60)
days following termination, Licensee must provide The Regents with a written notice that Data has been returned or destroyed.

    	108

    	 

    

29.3 With
regard to biological material received by Licensee from The Regents, if any, including any cell lines, vectors, genetic material,
derivatives, products progeny or material derived therefrom ("Biological Material"), Licensee agrees:

 

29.3.1 not
to use Biological Material except for the sole purpose of performing under the terms of this Agreement;

 

29.3.2 not
to transfer Biological Material to others (except to its employees, agents or consultants who are bound to Licensee by like obligations
conditioning and restricting access, use and continued use of Biological Material) without the express written permission of The
Regents, except that Licensee is not prevented from transferring Biological Material that:

 

29.3.2.1
becomes publicly available other than through acts or omissions of Licensee; or

 

29.3.2.2
is lawfully obtained by Licensee from sources independent of The Regents;

 

29.3.3 to
safeguard Biological Material against disclosure and transmission to others with the same degree of care as it exercises with
its own biological materials of a similar nature;

 

29.3.4 to
destroy all copies of Biological Material at the termination of this Agreement.

 

30. HUMANITARIAN
DEVICE EXEMPTION

The parties
agree that certain Licensed Products may qualify as a Humanitarian Use Device ("RUD") pursuant to the Safe Medical Devices
Act of 1990 and it may be appropriate to apply for a Humanitarian Device Exemption ("HOE") pursuant to that act. If
Licensee decides to seek a HUD designation or apply for an HOE, The Regents agrees to cooperate with the Licensee, to the extent
permissible by law and the policy of The Regents, in connection with the HUD and HOE, with any incremental costs at the Licensee's
expense.

    	109

    	 

    

 

31. MISCELLANEOUS

 

31.1 The
headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.

 

31.2 This
Agreement is not binding on the parties until it has been signed below on behalf of each party. It is then effective as of the
Effective Date.

 

31.3 No
amendment or modification of this Agreement is valid or binding on the parties unless made in writing and signed on behalf of
each party.

 

31.4 This
Agreement embodies the entire understanding of the parties and supersedes all previous communications, representations or understandings,
either oral or written, between the parties relating to the subject matter hereof. This Agreement supersedes and replaces the
First Agreement, First Amendment and Second Amendment and the First Agreement, First Amendment and Second Amendment shall be of
no further force or effect.

 

31.5 In
case any of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable in any respect, that invalidity,
illegality or unenforceability will not affect any other provisions of this Agreement and this Agreement will be construed as
if the invalid, illegal or unenforceable provisions had never been contained in it.

 

31.6 None
of the provisions of this Agreement is intended to create any form of joint venture between the parties, rights in third parties
or rights that are enforceable by any third party.

    	110

    	 

    

IN WITNESS
WHEREOF, both The Regents and Licensee have executed this Agreement, in duplicate originals, by their respective and duly authorized
officers on the day and year written.

 

	CUTANOGEN
    CORPORATION		THE
    REGENTS OF THE UNIVERSITY OF CALIFORNIA
			
	By:
    /s/ Steven T. Boyce		By:
    /s/ Alan B. Bennett
	(Signature)		(Signature)
			
	Name:
    Steven T. Boyce		Name:
    Alan B. Bennett
			
	Title:
    President		Title:
                                                                      Executive Director, Research
        Administration and Technology
        Transfer

        

	
	
			
	Date:
    3/5/01		Date:
    03/12/01

 

    	111

    	 

    

Exhibit
E – The First Amendment to the Amended and Restated Exclusive License Agreement between The Regents of the University of
California and Cutanogen Corporation.

FIRST
AMENDMENT TO THE AMENDED AND RESTATED EXCLUSIVE LICENSE AGREEMENT

This
amendment ("Amendment") is effective this 23rd day of November 2005, between The Regents of
the University of California ("The Regents), a California corporation, having its statewide administrative offices at 1111
Franklin Street. 12th Floor, Oakland, California 94607-5200 and Cutanogen Corporation ("Cutanogen"), an Ohio corporation,
having a principal place of business at 3130 Highland Avenue, Suite 3420, Cincinnati, Ohio 45219.

BACKGROUND

A.                 
The Regents and Cutanogen entered into a license agreement effective March 12, 2001 (UC Control No. 2001-04-0465). entitled AMENDED
AND RESTATED EXCLUSIVE LICENSE AGREEMENT for LIVING HUMAN SKIN REPLACEMENTS AND CULTURED SKIN SUBSTITUTES ("License Agreement").
wherein Cutanogen was granted certain rights. 

B.                 
Cutanogen desires that the License Agreement be amended to extend a diligence term. and The Regents is agreeable to such substitution.

 

The parties
agree as follows:

1                    
The Regents and Cutanogen agree to delete paragraph 8.3.2 of the License Agreement and replace it with the following: 

"8.3.2
submit a pre-marketing approval or other marketing approval application covering Licensed Product (the "Primary Application")
to the U.S. Food and Drug Administration by December 31, 2006".

2                    
The Regents hereby release Cutanogen, its successors and assigns from all liability and obligations. of any kind whatsoever, which
The Regents have ever had. now have or may have under said License Agreement arising before or as of the effective date of this
Amendment solely limited to the requirement set forth in paragraph 8.3.2 of the License Agreement deleted by this Amendment, which
had required Cutanogen to submit a pre-marketing approval or other marketing approval application covering Licensed Product (as
that term is defined in said License Agreement) to the U.S. Food and Drug Administration by July 31.2005. 

    	112

    	 

    

3                    
Said License Agreement shall remain unchanged in all other respects and shall remain in full force and effect. 

The
parties have executed this Amendment in duplicate originals by their respective authorized officers on the following day and year.

 

	CUTANOGEN
    CORPORATION	THE
    REGENTS OF THE UNIVERSITY OF CALIFORNIA
	 By:
    /s/Steven T Bryce	 By:
    /s/Neil Kilcoin
	Name:
    Steven T.Bryce	Name:
    Neil Kilcoin
	Title:
    President	Title:
    Bus. Development and IP Manager Office of Technology Transfer
	Date:
    11/16/05	Date:
    11/23/05

    	113

    	 

    

Exhibit
F – The License Agreement between Cutanogen Corporation on the one hand and the University of Cincinnati and Shriners Hospitals
for Children on the other hand.

    	114

    	 

    

 

LICENSE
AGREEMENT

 

THIS
AGREEMENT is made and effective as of the date of last signing (herein the "Effective Date”) by and among Cutanogen
Corporation, a corporation of Ohio having a principal place of business at 3130 Highland Avenue, Suite 3420, Cincinnati, Ohio
45219-2374 (herein referred to as "Cutanogen"); the University of Cincinnati, having a place of business at Room G-7
Wherry Hall, Box 670829, Cincinnati. Ohio 45221-0829 (herein referred to as "UC"); and Shriners Hospitals for Children,
having a place of business at PO Box 31356, Tampa, Florida 33631-3356 (herein referred to as "SHC").

 

INTRODUCTION

 

1        
WHEREAS, UC and SHC (herein known collectively as the "Licensors") have developed and are continuing research in the
area of the Technology, as defined in Article 1.1 of this Agreement; and 

2        
WHEREAS, Cutanogen wishes to acquire license rights to and develop the Technology; and 

3        
WHEREAS, Cutanogen and the Licensors mutually desire to formalize an agreement which delineates their respective rights and obligations
with respect to the Technology; 

4        
WHEREAS, the Licensors are the lawful joint owners of the Technology and have the right to grant the license as provided herein;
and 

5        
WHEREAS, in order to market products based on the Technology. Cutanogen will have to acquire rights under certain Background Patents,
as defined in Article 1.23. 

 

NOW THEREFORE,
in consideration of the mutual covenants and promises contained in this Agreement and other good and valuable consideration, the
Licensors and Cutanogen agree as follows.

 

ARTICLE
1 - DEFINITIONS

 

In
the terms defined and used herein, the singular shall include the plural and vice versa. Terms in this Agreement (other than names
of Parties and Article Headings) which are set forth in uppercase letters have the meanings established for such terms in the
succeeding paragraphs of this Article I.

 

1.1               
"Technology" shall mean the technology described in the Patents and all Improvements thereto. 

    	115

    	 

    

1.2               
"Patents" shall mean all U.S. and foreign patent applications and patents arising from the following UC invention disclosures
and SHC Records of Medical Invention and from any Improvements thereto: 

 

	UC
    90-022	Casting
    Device for Implantable Biopolymer Substrates
	UC
    91-017	Lipid...enriched
    Skin Substitute
	UC
    94-038	Topical
    Antimicrobial Mixtures for Wound Care
	SHC	Topical
    Nutrient Formulations for Wound Treatment, signed October 27.1993; submitted to SHC, Tampa., November 8, 1993.
	SHC	Cultured
    Skin Substitutes for Wound Treattnent: Concept, Composition and Uses; signed January 14, 1997; submitted to SHC, Tampa., January
    14, 1997.

 

1.3               
"Valid Claim" shall mean any claim in an unexpired patent or pending in a patent application included within the Patents
which has not been held unenforceable, unpatentable, or invalid by a decision of a court or other governmental agency of competent
jurisdiction. unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer. For any country in which there should be two or more such decisions conflicting with
respect to the validity of the same claim, the decision of the higher or highest tribunal shall thereafter control; however, should
the tribunals be of equal rank, then the decision or decisions upholding the claim shall prevail when the conflicting decisions
are equal in number, and the majority of decisions shall prevail when the conflicting decisions are unequal in number. 

 

1.4               
"Sublicensee" shall mean any person or entity, other than an Affiliate, sublicensed by Cutanogen to practice Patent(s).

 

1.5               
"Product" shall mean any product made, used or sold by Cutanogen and/or a Sublicensee under one or more Valid Claims
of Patents. 

 

1.6               
"Process" shall mean any and all processes practiced by Cutanogen and/or a Sublicensee under one or more Valid Claims
of Patents. 

 

1.7               
"Net Sales" shall mean the aggregate gross revenues derived by Cutanogen from Cutanogen' s sale of Produets to or Cutanogen's
practice of Processes for an unaffiliated third party in an arms length transaction., less credits granted on account of price
adjustments, normal and customary trade discounts, recalls, rejection or return of items previously sold. and excises, sales taxes,
duties or other taxes imposed upon and paid with respect to such sales. In the event that Cutanogen is not permitted under an
:HDE or other government regulation anywhere in the world to pass on the cost of royalties to its customers, such sales shall
be excluded from Net Sales. 

 

1.8               
"Calendar Quarter" shall mean the three (3) months ending on the last day of March, June, September and December of
each year.

 

1.9               
"Parties" in singular or plural as required by the context shall mean Cutanogen, UC and/or SHC as each of those parties
is defined herein. 

 

1.10           
"FDA" shall mean the United States Food and Drug Administration, or any comparable government agency of any other country.

 

1.11           
"IDE" shall mean an Investigational Device Exemption filing v.ith the FDA, or a comparable regulatory filing in any
other country. 

    	116

    	 

    

 

1.12           
“HUD" shall mean a Humanitarian Use Device as designated by the FDA pursuant to the Safe Medical Devices Act of 1990
and the FDA regulations at 21 CFR Part 814. or a comparable regulatory designation in any other country. 

 

1.13           
"HDE"' shall mean a Humanitarian Device Exemption pursuant to the Safe Medical Devices Act of 1990 and the FDA regulations
at 21 CFR Part 814, Subpart H. or a comparable regulatory designation in any other country. 

 

1.14           
"Cutanogen" shall mean Cutanogen Corporation and its Affiliates. 

 

1.15           
“Affiliate" shall mean any company in which Cutanogen owns or controls at least 50% of the voting stock or which owns
or controls at least 50% of the voting stock of Cutanogen, or which, together with Cutanogen, is controlled by a third party which
owns or controls at least 50% of the voting stock of each. 

 

1.16           
“Term” shall mean the period beginning on the Effective Date and extending to the expiration of the last to expire
Patent. 

 

1.17           
"lmprovement” shall mean any modification of a Product or Process. or both, or other new invention within the field
of skin substitutes made during the Term in whole or in part by a UC Inventor or SHC Inventor using Cutanogen funds or facilities,
or working in a contractual consulting or advisory capacity to Cutanogen or any other joint invention of a UC or SHC Inventor
and an Cutanogen Inventor within said field, to the extent that UC and SHC have the right to grant a license thereto. 

 

1.18           
"UC Inventor" shall mean an inventor either employed by UC or working full-time or part-time in a UC facility.

 

1.19           
"SHC Inventor" shall mean an inventor either employed by SHC or working full-time or part-time in an SHC facility. 

 

1.20           
"Cutanogen Inventor" shall mean an inventor employed by Cutanogen who is neither a UC Inventor nor an SHC Inventor.

 

1.21           
"Party" shall mean Cutanogen, UC and/or SHC. 

 

1.22           
"Background Patents" shall mean any or all of the following patents, including pending patent applications and foreign
patents derived from the same applications, invented in whole or in part by Steven Boyce, which in the absence of a license from
the owners would prevent Cutanogen from marketing Products: 

 

	Owned
    by University of California	Owned
    by University Patents, Inc
	US
    5,711,172	US
    4,940,666
	US
    5,273,900	US
    4,673,649
	PCT/UC88/08305	
	EP
    363,400	
	JP
    03/502,049	
	DE
    3,878,909	
	US
    Appl. Ser. No. 08/376,293	
	Now:
    US 5,976,878	

 

1.23           
"Net Sublicensing Fees" shall mean any lump sum fees paid to Cutanogen by a Sublicensee in consideration for sublicense
rights to Products or Processes, less any out-of-pocket expenses incurred by Cutanogen that are directly and solely attributable
to the negotiation and drafting of the relevant sublicense agreement. 

 

1.24           
"First Sale" shall mean Cutanogen's or a Sublicensee's first commercial sale of a Product to, or first commercial practice
of a Process for, an unaffiliated third party following regulatory approval Any sale that is made under an HDE or other government
regulation anywhere in the world prohibiting the payment of royalties shall not be counted as a First Sale. 

    	117

    	 

    

ARTICLE
2 – LICENSE

 

2.1               
The Licensors agree to grant and hereby grant to Cutanogen an exclusive, worldwide license, with the right to sublicense, to make,
have made, use. market, offer for sale, sell and otherwise dispose of Pro duets and practice Processes under the Patents. 

 

2.2               
The exclusive license specified in Paragraph 2.1 is subject to required, limited nonexclusive license rights, if any, of the United
States Government: and to a reserved right of the Licensors to utilize the Technology and/or Patents for non-commercial research
and educational purposes within facilities owned or operated by either UC or SHC. 

 

2.3               
If permissible under FDA regulations, UC agrees to use reasonable efforts to arrange for transfer to Cutanogen of any IDE, HDE
or HOD designation that has been granted to UC with respect to Products or Processes. 

    	118

    	 

    

ARTICLE
3 - R&D PERFORMANCE & MARKETING

 

3.1               
Cutanogen agrees to use efforts consistent with its reasonable, commercial judgment to develop Products and Processes and to otherwise
add value to Technology, and will for such purpose make available adequate resources and qualified personnel 

 

3.2               
The parties agree that certain Products may serve to treat a disease or condition that affects or is manifested in fewer than
4,000 individuals in the United States per year, and thus that it may be appropriate to seek to have the FDA designate such Product
as an HUD and to apply for an HDE for such Product. If Cutanogen decides to seek an HUD designation or to apply for an HDE, UC
and SHC agree to cooperate with Cutanogen in connection with the HUD and HDE, with any incremental costs at Cutanogen's expense.

 

ARTICLE
4 - PATENTS AND PATENT COSTS

 

4.1               
Patents will be owned by UC if invented only by UC Inventors; by SHC if invented only by SHC Inventors; and by Cutanogen if invented
only by Cutanogen Inventors. Patents will be jointly owned by UC, SHC and/or Cutanogen if jointly invented by UC. SHC and/or Cutanogen
Inventors respectively. Inventors is defined under US patent law. 

 

4.2               
Cutanogen shall file in the owners' names, prosecute (including interferences. re-issues, oppositions and appeals), procure and
maintain Patents in the United States, and in such foreign countries as Cutanogen may choose. at Cutanogen’s sole expense
and in Cutanogen’s sole discretion. 

 

4.3               
The Licensors shall cooperate with Cutanogen with respect to patent activities, and Cutanogen agrees to promptly reimburse the
Licensors for any out-of-pocket expenses they may incur at Cutanogen's request under this Article 4. Payments not received within
thirty (30) days after Cutanogen' s receipt of an invoice from the Licensors shall be subject to an interest charge of one percent
(1%) per month. 

 

4.4               
Cutanogen and the Licensors shall keep each other informed in timely fashion of all patent actions hereunder. The Licensors shall
have the right to approve actions taken on their behalf: but will not unreasonably withhold approval. A patent action shall be
deemed approved if no objection is received by Cutanogen within thirty (30) days after notification of both Licensors.

    	119

    	 

    

4.5               
 If Cutanogen elects not to file, prosecute or maintain a patent application or patent included in Patents that is solely or jointly
owned by UC and/or SHC, those Parties shall be given the opportunity to do so at their own expense. Said Patent will be free and
clear of this Agreement, and in the case of jointly-owned patents, Cutanogen will retain its joint ownership rights and the Parties
will have no duty of royalty or accounting to each other with respect to such jointly-owned Patents. 

 

4.6               
Within sixty (60) days after any Party receives an invention disclosure on an Improvement, said Party shall send copies of the
invention disclosure to the other Parties. 

 

ARTICLE
5 - PUBLICATION RIGHTS

 

5.1.             
Work done by employees of or in facilities of UC or SHC in collaboration with Cutanogen must be publishable. The Licensors will
require their employees to submit manuscripts describing such work and/or Technology to Cutanogen at least thirty (30) days before
presenting same or submitting it for publication or other public disclosure, and at Cutanogen' s request UC or SHC will delete
any Cutanogen Confidential Information and will delay presentation or submission for publication or other public disclosure up
to an additional 90 days to permit the filing of patent applications. 

 

ARTICLE
6 – PAYMENTS AND ROYALTIES

 

6.1.             
In recognition of Cutanogen's anticipated need to obtain rights to the Background Patents from third parties, the Licensors waive
any initial licensing fee or milestone payments which might otherwise apply in this situation. 

 

6.2.             
Cutanogen agrees to pay the Licensors a two percent (2%) running royalty on Cutanogen's Net Sales of Products and Processes. 

 

6.3.             
a.In the event that Cutanogen sublicenses its rights hereunder independent of the Background Patents, Cutanogen shall pay
the Licensors a royalty of fifty percent (50%) of any Net Sublicensing Fees and running royalties received by Cutanogen from Sublicensees.

b.In
the event that Cutanogen sublicenses its rights hereunder in combination with the Background Patents, Cutanogen shall pay the
Licensors a royalty of one-sixth (1/6) of any Net Sublicensing Fees and running royalties received by Cutanogen from Sublicensees.

 

6.4.             
Beginning in the second full calendar year following premarket approval by the FDA or the approval of a product .development protocol
by FDA, minimum annual royalties shall be paid to the Licensors as follows in the amount of $25,000 per year. Should the royalties
paid to the licensors under Sections 6.2 and 6.3 combined, for moneys received by Cutanogen during each calendar year in question,
be less than the minimum royalty allocated for such year, the difference shall be payable by Cutanogen when the royalty payment
for the last Calendar Quarter of such year is due in accordance with Section 7.1. 

    	120

    	 

    

6.5.             
Cutanogen may reduce royalties otherwise payable under paragraphs 6.2 and 6.3. but not minimum royalties payable under paragraph
6.4, by an amount not to exceed fifty percent (50%) in any calendar quarter, until it has recovered all of its patent and development
expenses related to Patents, Products and Processes. Patent expenses under this paragraph shall include the costs of patent prosecution,
maintenance and defense, as well as any legal fees, lump sum payments and running royalties paid to a third party, other than
the owner(s) of the Background Patents, to settle allegations of infringement of said third party's patents. Development expenses
under this paragraph shall include all costs of product development prior to First Sale, as well as all expenses attributable
directly to the first three (3) years of post market surveillance of each Product or Process if required by regulatory agencies
such as the FDA.

 

6.6.             
Payments not received "'within thirty (30) days after the due date shall be subject to an interest charge of one percent
(1%) per month. 

 

ARTICLE
7-REPORTS AND CURRENCY CONVERSIONS

 

7.1.             
Prior to premarket approval by FDA of, or FDA approval of a product development protocol for, the first Product or Process. Cutanogen
shall deliver to Licensors within thirty (30) days after the end of each calendar year a written report showing the progress of
its development program, along with any royalties or other payments due under this Agreement for such calendar year and at the
same time make said payment. Following premarket approval by FDA of, or FDA approval of a product development protocol for, the
first Product or Process, Cutanogen, within thirty (30) days after the close of each Calendar Quarter during the term of this
Agreement (including the close of any Calendar Quarter following any termination of this Agreement), shall also report to Licensors
all royalties or other payments accruing to Licensors under sections 6.2 and 6.3 during such Calendar Quarter and shall include
its sales of Products and its computation of royalties or other payments to Licensors due under this Agreement for such Calendar
Quarter. All Net Sales shall be segmented in each such report according to sales on a country-by-country basis including the rates
of exchange used for conversion to US dollars from the currency in which such sales were made. Any tax (excluding any penalties
or interest) that Cutanogen is required to pay or withhold for the Licensors' accounts will be deducted from the amount of royalties
otherwise due. 

a)                  
In cases of sales outside the USA royalty payments shall be made in U.S.dollars. The amounts shall be calculated using currency
exchange rates as set forth in The Wall Street Journal on the last day of the Calendar Quarter. 

b)                  
With respect to Net Sales, except as otherwise allowed in Section 1.7 entitled "Net Sales," all payments due shall be
made without deduction for taxes, assessments, or other charges of any kind which may be imposed on Cutanogen by the government
of the country where the transactions occur or any political subdivision thereof with respect to any amounts payable pursuant
to this Agreement, and such taxes, assessments, or other charges shall be assumed by Cutanogen. 

    	121

    	 

    

7.2.             
Cutanogen shall keep for a period of three (3) years following the year to which such records relate, full, true and accurate
books of accounts and other records containing all information and data which may be necessary to ascertain and verify the remuneration
payable hereunder. During the term of this Agreement and for a period of three (3) years following its termination, Cutanogen's
records and books of account shall be open for one inspection annually upon reasonable notice and at reasonable intervals during
business hours by an independent certified accountant selected by the Licensors, for the purpose of verifying the amount of payments
due and payable. In the event that any such inspection shows an underreporting and underpayment in excess of five percent (5%)
for any twelve (12) month period, then Cutanogen shall pay the cost of such examination as well as any additional sum that would
have been payable to Licensors had Cutanogen reported correctly, plus interest at one percent (1%) per month. 

 

ARTICLE
8 - INFRINGEMENT

 

8.1.             
Each Party shall promptly report in writing to the other Parties during the term of this Agreement any infringement or suspected
infringement of any Patent, or unauthorized use or misappropriation of Technology or patents by a third party of which it becomes
aware, and shall provide the other Party with all available evidence supporting said infringement, suspected infringement or unauthorized
use or misappropriation. 

 

8.2.             
Except as provided in Section 8.3, Cutanogen shall have the right to initiate an infringement suit or other appropriate action
against any third party who at any time has infringed or is suspected of infringing any of the Patents or of using without proper
authorization all or any portion of Technology. Cutanogen shall give the Licensors sufficient advance written notice of its intent
to initiate such action and the reasons therefor, and shall provide the Licensors with an opportunity to make suggestions and
comments regarding such action, and if necessary the Licensors agree to be named as a nominal party therein, subject to the approval
of the Attorney General of Ohio on behalf of UC and the General Counsel of SHC on behalf of SHC. Cutanogen shall keep the Licensors
promptly informed of the status of any such action. Cutanogen shall have the sole and exclusive right to select counsel for and
shall pay all expenses of such action, subject to the approval of the Attorney General of Ohio on behalf of UC and the General
Counsel of SHC on behalf of SHC. The Licensors shall offer reasonable assistance to Cutanogen in connection therewith at no charge
to Cutanogen except for reimbursement of reasonable out-of-pocket expenses. Cutanogen may settle any such action subject to prior
approval of the Licensors, which approval shall not be unreasonably withheld. Any damages, profits or awards of whatever nature
recovered from such action over and above expenses, including but not limited to amounts paid to attorneys, shall be treated as
Net Sales by Cutanogen under this Agreement's Section 6.2 for purposes of royalty calculations and payments. 

    	122

    	 

    

8.3.             
In the event that Cutanogen does not within twelve (12) months of a written request for action from the Licensors (a) secure cessation
of the infringement, or (b) enter suit against the infringer, or (c) provide the Licensors with evidence of the pendency of a
bona fide negotiation for the acceptance by the infringer of a sublicense under Patents, the Licensors shall have the right but
not the obligation to take action against the infringer at their own expense. Cutanogen shall offer reasonable assistance in connection
with such action at no charge to the Licensors except for the reimbursement of reasonable out-of-pocket expenses. Any damages,
profits or awards of whatever nature recovered from such action shall belong solely to the Licensors. 

 

ARTICLE
9 – CONFIDENTIALITY

 

9.1.             
In connection with this Agreement, it is acknowledged that each Party may disclose its confidential and proprietary information
to the other Party. Any such information. identified at the time of its initial disclosure as confidential or proprietary, and
that is first disclosed in writing, or if disclosed orally is later transmitted in written form within thirty (30) days of said
oral disclosure, and in any such initial or subsequent written format is labeled as "Confidential" or "'Proprietary"
is referred to herein as "Confidential Information.” 

 

9.2.             
Each Party hereto shall maintain the Confidential Information of the other Party in confidence. and shall not disclose or otherwise
communicate such Confidential Information to others, or use it for any purpose except pursuant to, and in order to carry out,
the terms and objectives of this Agreement, and hereby agrees to exercise every reasonable precaution to prevent and restrain
the unauthorized disclosure of such Confidential Information by any of its directors, officers, employees, consultants or agents.

 

9.3.             
The provisions of Section 9.2 shall not apply to any Confidential Information which: 

a)                  
has been lawfully disclosed to the recipient without obligation of confidentiality by an independent third party rightfully in
possession of the Confidential Information: or 

b)                  
has been published or is generally known to the public in accordance with Article 5 or otherwise through no fault or omission
by any of the Parties; or 

c)                  
was independently known to the recipient prior to receipt from the disclosing Party, as demonstrably documented in wrinen records
of the recipient; or 

d)                  
is required to be disclosed by any of the Parties to comply with applicable laws, to defend or prosecute litigation or to comply
with governmental regulations, provided that such Party takes reasonable and lawful actions to avoid andlor minimize the degree
of such disclosure. 

    	123

    	 

    

ARTICLE
10 - WARRANTIES

 

10.1.          
The Licensors hereby represent, covenant and warrant that they have full tide to the Patents and Technology and that neither of
them bas sold, licensed or otherwise conveyed to a third party any rights to the Patents or Technology that are or could be inconsistent
with the license specified in Paragraph 2.1. 

 

10.2.          
Nothing in this Agreement shall be construed as: 

a)                     
A warranty or representation by the Licensors as to the validity or scope of any patent; 

b)                     
A warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement
is or will be free from infringement of patents, copyrights and/or trademarks of third parties; 

c)                     
An obligation of the Licensors to bring or prosecute actions or suits against third parties for infringement; 

d)                     
Conferring rights to use the advertising, publicity or otherwise any trademark or the name of UC or SHC, or 

e)                     
Granting by implication, estoppel or otherwise any licenses under patents of UC or SHC other than Patents, regardless of whether
such other patents are dominant over or subordinate to any Patent. 

 

10.3.          
Except as expressly set forth in this Agreement. UC AND SHC MAKE NO REPRESENTATIONS, EXTEND NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, AND ASS1JME NO RESPONSIBILITIES WHATEVER WITH RESPECT TO THE USE, SALE OR OTHER DISPOSITION BY Cutanogen OR
ITS VENDERS, SUBLICENSEES OR OTHER TRANSFEREES OF PRODUCTS OR PROCESSES INCORPORATING OR MADE BY USE OF INVENTIONS LICENSED UNDER
THIS AGREEMENT OR INFORMATION, IF ANY, FURNISHED UNDER THIS AGREEMENT. SUCH INVENTIONS AND INFORMATION ARE PROVIDED AS IS, WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. 

 

ARTICLE
II NOTICES

 

11.1.          
Any notice, request, report or payment required or permitted to be given or made under this Agreement by any Party shall be given
by sending such notice by certified mail, return receipt requested, to the address set forth below or such other address as such
Party shall have specified by written notice given in conformity herewith. Any notice not so given shall not be valid and effective
unless and until actually received, and any notice given in accordance with the provisions of this Section shall be effective
when mailed. 

    	124

    	 

    

 

	To
    Cutanogen:	President
		Cutanogen
    Corporation
		3130
    Highland Avenue, Suite 3420
		Cincinnati,
    Ohio 45221
		Fax:
    513-221-1891

 

	To
    UC:	Director
		Office
    of Intellectual Property
		G-7
    Wherry Hall
		P.O.
    Box 670829
		University
    of Cincinnati
		Cincinnati,
    Ohio 45267-0829
		Fax:
    513-558-2296

 

	To
    SHC:	Director
    of Research Programs
		Shriners
    Hospitals for Children
		PO
    Box 31356
		Tampa,
    Florida 33631-3356
		Fax:
    813-281-8113

 

11.2.          
Cutanogen shall send all reports and communications required under this Agreement to UC with a copy to SHC. 

 

11.3.          
Cutanogen shall submit all payments due under this Agreement by check made payable to "University of Cincinnati,” and
to UC at the address given above, or by wire transfer to UC's account, with a copy of either to SHC. 

 

11.4.          
UC is responsible for administering this License Agreement on behalf of itself and SHC, and will share payments with SHC as stipulated
under a separate agreement between the Licensors. 

ARTICLE
12 – TERMINATION

 

12.1.          
Cutanogen may terminate this Agreement at any time by providing three (3) months' written notice to the Licensors. 

    	125

    	 

    

12.2.          
In the event that Cutanogen shall be in substantive default of any of its material obligations hereunder, the Licensors may at
their sole option: (a) terminate this Agreement, or (b) convert the exclusive license hereunder to a non-exclusive license. Exercise
of option (a) or (b) by the licensors shall be by written notice to Cutanogen specifying the nature of the default including the
amount of royalties then due, if any, and shall be effective sixty (60) days following the effective date of said notice unless
Cutanogen cures said default prior to the expiration of said period of sixty (60) days. 

 

12.3.          
Termination of this Agreement as provided under Sections 12.1 or 12.2 shall terminate all sublicenses to Patents which have been
granted by Cutanagen, provided that any Sublicensee may elect to obtain a license to said Patents by advising the Licensors in
writing, within sixty (60) days after the Sublicensee's receipt of written notice of such termination, of its election, and of
its agreement to assume with respect to the Licensors all the obligations relating to said Patents (including obligations for
payment) contained in its sublicensing agreement with Cutanogen. Any sublicense granted by Cutanogen shall contain a provision
corresponding to this Section 12.3. 

 

12.4.          
Upon termination of this Agreement or conversion to a non-exclusive license as provided under Sections 12.1 or 12.2, no Party
shall be relieved of any obligations incurred prior to such termination or conversion, and the obligations of the Parties under
any provisions which by their nature are intended to survive any such termination or conversion shall sur.ive and continue to
be enforceable. 

 

ARTICLE
13 - CONFLICTS OF INTEREST

 

13.1.          
To reduce the prospect of conflicts of interest, it is agreed that any UC or SHC employees who are concurrently employed by Cutanogen
will sign Appendix A, agreeing to the terms and conditions of this Agreement and agreeing to forego any compensation under UC's
or SHC's intellectual property policies and procedures in favor of receiving their compensation in whatever form from Cutanogen
for their efforts on Cutanogen's behalf 

 

13.2.          
Cutanogen will use its best efforts to ensure that any of its employees who is concurrently employed by UC and/or SHC will comply
with all collateral employment policies and procedures of said institution(s), as well as policies and procedures governing the
disclosure and management of potential conflicts of interest. 

 

13.3.          
Cutanogen agrees not to conduct work directed toward the development of commercial Products and Processes within the laboratories
or facilities of either UC or SHC. 

    	126

    	 

    

ARTICLE
14 – MISCELLANEOUS

14.1.          
 

	Each Licensor shall indemnify and
bold harmless Cutanogen, and will defend Cutanogen at Licensor's expense, from and against all losses, costs, liabilities, demands,
damages, fees or expenses arising from the willful acts, omissions or negligence of Licensor's own employees and agents in the
performance of this Agreement.

 

	Cutanogen shall indemnify and bold
harmless the Licensors, and will defend the Licensors at Cutanogen's expense, from and against any and all losses, costs, liabilities,
demands, damages, fees or expenses, including but not limited to product liability and patent infringement liability, arising
out of the use by Cutanogen or a Sublicensee of Technology or Patents, or out of the manufacture, use, commercialization, marketing.,
sale or other disposition by Cutanogen or any Sublicensee of any Product or Process.

 

	The obligations of the Parties under
paragraphs 14.1 a and 14.1 b shall survive any termination or conversion of the Agreement and continue to be enforceable.

 

	Notwithstanding the foregoing, no
Party shall be required to indemnify, defend or hold harmless another Party unless the first Party has received notice of any
claim for which indemnity or defense is sought under this Agreement, pursuant to Article 11. 1 hereof, within thirty (30) days
after the second Party has become aware of any fact, condition or event that said Party asserts gives rise to its right to indemnity
or defense hereunder. Licensors and Cutanogen will use all reasonable efforts to cooperate fully with respect to the defense of
any claim for which indemnity or defense is sought pursuant hereto.

 

14.2.          
Cutanogen shall obtain and carry in full force and effect commercial, general liability insurance which shall protect Cutanogen
and Licensors with respect to events covered by Paragraph 14.1 above. Such insurance shall be written by a reputable insurance
company authorized to do business in the State of Ohio, shall list UC and SHC as additional named insureds thereunder, shall be
endorsed to include product liability coverage and shall require thirty (30) days written notice to be given to UC and SHC prior
to any cancellation or material changes thereof. The limits of such insurance shall be not less than two million dollars ($2.000,000)
per occurrence with an aggregate of five million dollars ($5,000,000) in aggregate for personal injury or death, and two million
dollars ($2,000,000) per occurrence with an aggregate of five million dollars ($5,000,000) in aggregate for property damage. Cutanogen
shall provide Licensors with Certificates of Insurance evidencing the same.

 

14.3.          
In the event that Cutanogen shall grant sublicenses to third parties under this Agreement, each such sublicense shall be embodied
in a written document and copied to the Licensors at the time of its grant. Cutanogen hereby assumes responsibility for the performance
of all obligations imposed on Sublicensees by this Agreement and all sublicenses or other grant of rights contemplated by this
Agreement shall be consistent with the terms and conditions of this Agreement.

14.4.          
Neither this Agreement nor any of the rights or obligations hereunder may be assigned by any Party without the prior consent of
the other Parties, which consent shall not be unreasonably withheld. Unless any of the other Parties provides written notice to
the requesting Party within ninety (90) days of the requesting Party's request for consent hereunder of their intent to withhold
consent, the consent of the other Parties hereunder shall be deemed to have been given. Notwithstanding the foregoing, Cutanogen
may assign this Agreement without the Licensors' consent to any purchaser of all or substantially all of Cutanogen's business
to which this Agreement relates, provided the intended assignee agrees in writing to accept all of the terms and conditions of
this Agreement. 

 

14.5.          
It is understood that the Licensors are subject to United States laws and regulations controlling the export of technical data,
computer software, laboratory prototypes and other commodities (including inter alia the Arms Export Control Act as amended.,
and the Export Administration Act of 1979 as amended, and that their obligations hereunder are contingent on compliance with all
applicable United States export laws and regulations. The transfer of certain technical data and/or commodities may require a
license from the cognizant agency of the United States Government and/or written assurances by Cutanogen that Cutanogen shall
not export data or commodities to certain foreign countries without prior approval of such agency. The Licensors neither represent
nor warrant that a license shall not be required nor that, if required, it shall be issued. In any event, Cutanogen specifically
agrees not to export or re-export any information and/or technical data and/of products in violation of any applicable USA laws
and/or regulations. 

 

14.6.          
This Agreement shall be construed under and interpreted under the laws of the State of Ohio. U.S.A., except that questions affecting
the construction, validity and effect of any Patent shall be determined by the national law of the country in which the Patent
has been granted. 

 

14.7.          
In the event that any Party is prevented from performing or is unable to perform any of its obligations under this Agreement due
to any act of God, fire, casualty, flood, war, strike, lockout, failure of public utilities, government regulation or the like,
such Party shall give notice to the other Parties in writing promptly, and thereupon the affected Party's performance shall be
excused and the time for performance shall be extended for the period of delay or inability to perform due to such force majeure
occurrence. 

 

14.8.          
The waiver of a breach of default of any provisions of this Agreement by any Party must be in written form and signed by all Parties,
and shall not be construed as a waiver of any succeeding breach of the same or any other provision. 

 

14.9.          
Cutanogen shall have the right to register any mark with the Patent and Trademark Office and shall own any such mark approved
for inclusion on the Principal Register, or otherwise utilized by it in connection with the Product including without limitation
trademarks, trade dress, symbols, designs and Product color, shape and size. 

    	127

    	 

    

14.10.      
In the event that any term, provision, or covenant of this Agreement shall be determined by a court of competent jurisdiction
to be invalid. illegal, or unenforceable, that term will be curtailed, limited, or deleted, but only to the extent necessary to
remove such invalidity, legality, or unenforceability, and the remaining terms, provisions and covenants shall not in any way
be affected or impaired thereby. Further, the Parties will agree to legally enforceable provisions to replace any term, provision
or covenant determined to be invalid. illegal or unenforceable so as to put the Parties, as nearly as possible, in the same position
that they would have been had such term, provision or covenant not been held invalid, illegal or unenforceable. 

 

14.11.      
The article headings herein are for purposes of convenient reference only and shall not be used to construe or modify the terms
written in the text of this Agreement. 

 

14.12.      
 The relationship between the Parties is that of independent contractors and contractee. No Party shall be deemed to be an agent
of another in connection with the exercise of any rights hereunder, and none shall have any right or authority to assume or create
any obligation or responsibility on behalf of another. 

 

14.13.      
This Agreement contains the entire understanding of the Parties with respect to the matter contained herein. The Parties may,
from time to time during the continuance of this Agreement, modify, vary or alter any of the provisions of this Agreement, but
only by an instrument duly executed by authorized officials of both Parties hereto. 

 

IN WITNESS
WHEREOF the Parties hereto have caused this Agreement to be executed by their properly and duly authorized officers or representatives
as of the date first above

 

	UNIVERISTY
    OF CINCINNATI	CUTANOGEN
    CORPORATION
	/s/
                                                          Norman M. Pollack

        Signature
	/s/
                                                          Steven Boyce

        Signature

	Norman
                                                          M. Pollack Ph.D.

        Printed
        Name
	Steven
                                                          Boyce

        Printed
        Name

	Director
                                                          of Intellectual Property and University Patent Officer University of Cincinnati

        Title
	Founder
                                                          and President

        Title

	8/24/98

        Date
	5/15/98

        Date

	
	SHRINERS
    HOSPITALS FOR CHILDREN
	/s/John
                                                                      D. VerMass

        Signature

	John
                                                                      D. VerMass

        Printed
        Name

	President

        Title

	May
                                                                      29, 1998

        Date

    	128

    	 

    

Appendix
A to License Agreement Among the University of Cincinnati (UC). Shriners Hospitals for Children (SHC) and Cutanogen Corporation
(Cutanogen) 

The undersigned,
who is employed by Cutanogen as an employee, consultant or advisor and is concurrently employed by UC or SHC, has read, understood
and agrees to the terms and conditions of the Agreement between UC, SHC and Cutanogen to which this Appendix A is attached. The
undersigned agrees that compensation provided by Cutanogen, in whatever form provided, will be accepted in lieu of the portion
of licensing revenues paid by Cutanagen that normally would be shared· with the undersigned as an inventor or co-inventor
of any patent, patent application or other intellectual property licensed to Cutanogen by UC.

 

ACCEPTED
AND AGREED TO

 

	/s/Steven
                                                                       Boyce

        Signature

	Steven
                                                          Boyce

        Printed
        Name

	UC
                                                          and SHC

        Concurrent
        Employer (UC or SHC)

	5/15/98

        Date

    	129

    	 

    

Exhibit
G – Amendment to the License Agreement between Cutanogen Corporation on the one hand and the University of Cincinnati and
Shriners Hospitals for Children on the other hand.

    	130

    	 

    

 

AMENDMENT
TO LICENSE AGREEMENT

THIS
AMENDMENT (this "Amendment") to the License Agreement, dated as of August 24, 1998 (the “License Agreement"),
by and between Cutanogen Corporation, an Ohio corporation ("Cutanogen"), the University of Cincinnati ("UC")
and Shriners Hospitals for Children ("SHC"), is made effective as of December 29, 2005 ("Effective Date").
All defined terms set forth herein shall have the meanings set forth in the License Agreement, unless otherwise expressly set
forth herein.

RECITALS`

WHEREAS,
the Parties desire to amend certain of the provisions of the License Agreement;

NOW,
THEREFORE, in consideration of the foregoing and the mutual promises and covenants hereinafter set forth, Cutanogen, UC and SHC,
intending to be legally bound, hereby agree as follows:

AGREEMENT

1.                  
Section 1.1 of the License Agreement is hereby amended in its entirety to read as follows: 

1.10           
"Technology" shall mean the technology embodied in the Licensed IP, including, without limitation, the technology described
in the Patents, and all Improvements thereto." 

2.                  
Section 1.2 of the License Agreement is hereby amended in its entirety to read as follows: 

1.16           
''Patents'' shall mean any patent or patent application, and any patent issuing therefrom., together with any extensions, reissues,
reexaminations, substitutions, renewals, divisions, continuations and continuations-in-part thereof, all to the extent the foregoing
arise or issue from any Licensed IP, including, without limitation, the following issued patents and pending applications: 

1.                  
International Publication Number WO 03/076562 AI, publication dated September 18, 2003 "Apparatus for Preparing a Biocompatible
Matrix" 

2.                  
International Publication Number WO 2003/076604 A3, publication dated September 18, 2003 "Surgical Device for Skin Therapy
or Testing" 

3.                  
United States Patent Number US 6,905,105 B2, patent date 06-14-05 "Apparatus for Preparing a Biocompatible Matrix.

4.                  
United States Patent Application Publication Number US 2003/0170892 AI, publication date 09-11-03 "Surgical Device for Skin
Therapy or Testing" 

3.                  
Section 1.5 of the License Agreement is hereby amended in its entirety to read as follows: 

1.5               
"Product" shall mean any product made, used or sold by Cutanogen and/or a Sublicensee under any Licensed IP." 

4.                  
Section 1.6 of the License Agreement is hereby amended in its entirety to read as follows: 

1.6               
"Process" shall mean any and all processes practiced by Cutanogen and/or a Sublicensee under any Licensed IP."

5                    
Section 1.20 of the License Agreement is hereby amended in its entirety to read as follows:

1.20           
"Cutanogen Inventor" shall mean an inventor employed or otherwise retained (e.g., consultant) by Cutanogen; provided
that if such inventor is also a UC Inventor and/or an SHC Inventor, such inventor shall only be deemed a Cutanogen Inventor to
the extent that the relevant invention did not make use of the facilities, materials or other resources furnished by or through
UC and/or SHC." 

    	131

    	 

    

6.                  
Article 1 of the License Agreement is hereby amended to add the following new Sections: 

1.25           
"Intellectual Property" shall mean all worldwide patents, trade secrets, know-how and all other intellectual property
rights, including all applications and registrations with respect thereto, but excluding all trademarks, trade names, service
marks, logos and other corporate identifiers." 

1.26           
"Licensed IP" shall mean all Intellectual Property owned or controlled by Licensors arising from the following: 

                                            
i.                       
UC Invention Disclosures:

UC
90-022 Casting Device for Implantable Biopolymer Substrates

UC
91-017 Lipid-enriched Skin Substitute

UC
94-038 Topical Antimicrobial Mixtures for Wound Care

                                           
ii.                       
SHC Records of Medical Invention:

SHC
Topical Nutrient Formulations for Wound Treatment, signed October 27, 1993; submitted to SHC, Tampa, November 8, 1993

SHC
Cultured Skin Substitutes for Wound Treatment: Concept, Composition and Uses; signed January 14, 1997; submitted to SHC, Tampa,
January 14, 1997

                                         
iii.                       
Research and/or clinical studies conducted in whole or in part by a UC Inventor and/or SHC Inventor with respect to work initiated
by Steven Boyce regarding a skin substitute with human keratinocytes and fibroblasts and covering the following subject matter:

1)                  
regulation of cellular viability (DNA synthesis, mitochondrial metabolism) and phenotypes (epidermal barrier, basement membrane)
by culture conditions (media, biophysical environment); 

2)                  
 identification of molecular mediators (cytokines, extracellular matrix) of wound healing processes (angiogenesis, matrix structure);

3)                  
regulation of melanocyte distribution (cell density) and pigment expression (melanin content) to restore normal skin color; 

4)                  
stimulation of angiogenesis by addition of human dermal microvascular endothelial cells and morphogenesis of vascular analogs;

5)                  
 regulation and automation of keratinocyte growth rates and metabolism (reduction of lactic acid and ammonia) in the Kerator bioreactor;
or 

6)                  
treatment of extensive burns with cultured skin substitutes in the clinic by paired-site comparison to meshed, split-thickness
skin autograft." 

7.                  
Section 2.1 of the License Agreement is hereby amended in its entirety to read as follows: 

2.1   
The Licensors agree to grant and hereby grant to Cutanogen an exclusive, worldwide license, with the right to grant sublicenses,
under the Licensed IP (including, without limitation, the Patents) and any Improvements to make, have made, use (including, without
limitation, research and develop), market, offer for sale, sell and otherwise dispose of Products and practice the Processes.
Cutanogen shall have the exclusive option to extend the Term of such license on commercially reasonable terms negotiated in good
faith and mutually agreed upon by the parties." 

    	132

    	 

    

 

8.                  
Except as expressly provided in this Amendment, all of the terms and conditions of the License Agreement remain in full force
and effect and fully binding upon and enforceable against the Parties. 

9.                  
This Amendment may be executed in several counterparts, and all counterparts so executed shall constitute one agreement, binding
on the Parties, notwithstanding that such Parties are not signatory to the same counterpart. 

[Remainder
of page intentionally left blank. Signatures appear on following page.]

    	133

    	 

    

IN WI1NESS
WHEREOF, the Parties have executed this Amendment as of the Effective Date.

	UNIVERSITY
    OF CINCINNATI
	By:
    /s/Anne H. Chasser
	Name:
    Anne H. Chaser
	Title:
    Assoc. V.P. for IP

 

	SHRINERS
    HOSPITALS FOR CHILDREN
	By:
	Name:
	Title:

 

	CUTANOGEN
    CORPORATION
	By:
	Name:
	Title:

 

    	134

    	 

    

IN WITNESS
WHEREOF, the Parties have executed this Amendment as of the Effective Date.

	UNIVERSITY
    OF CINCINNATI
	By:
	Name:
	Title:

 

	SHRINERS
    HOSPITALS FOR CHILDREN
	By:
    /s/Ralph W Semb
	Name:
    Ralph W. Semb
	Title:
    President

 

	CUTANOGEN
    CORPORATION
	By:
	Name:
	Title:

    	135

    	 

    

IN WITNESS
WHEREOF, the Parties have executed this Amendment as of the Effective Date.

	UNIVERSITY
    OF CINCINNATI
	By:
	Name:
	Title:

 

	SHRINERS
    HOSPITALS FOR CHILDREN
	By:
	Name:
	Title:

 

	CUTANOGEN
    CORPORATION
	By:
    /s/Steven T Boyce
	Name:
    Steven T. Boyce, PhD
	Title:
    President

    	136

    	 

    

Exhibit
H – Settlement Agreement and Release dated February 2, 2006 between the Shriners Hospital for Children, Cutanogen Corporation,
the Shareholders of Cutanogen Corporation, and Cambrex Bio Science Walkersville, Inc.

    	137

    	 

    

SETTLEMENT
AGREEMENT AND RELEASE

 

THIS
SETTLEMENT AGREEMENT AND RELEASE is entered into effective as of the 2nd day of February, 2006 (the "Effective Date"),
by and among Shriners Hospitals for Children ("SHC"), Cutanogen Corporation ("Cutanogen"), the Shareholders
of Cutanogen Corporation (the "Shareholders") listed on Schedule I attached hereto. and Cambrex
Bio Science Walkersville, Inc. ("Cambrex").

 

WHEREAS,
the parties deem it prudent and advisable, in lieu of spending further time and expense, to settle all disputes and claims of
whatsoever kind and nature, arising out of or relating to finder's fees in connection with the acquisition of Cutanogen by Cambrex
whether pursuant to the Independent Contractor Agreement dated September 1, 2003 (the "IC Agreement" a copy of
which is attached hereto as Exhibit A and is, by reference, incorporated herein) or otherwise ("the SHC/Cutanogen Disputes");
and

 

WHEREAS.
the parties desire to memorialize certain ongoing business relationships relating to the development and commercial sales of the
Product (as defined in the Stock Purchase Agreement, dated as of the date hereof, by and among Cutanogen, the Shareholders and
Cambrex (the "Cutanogen Agreement"));

 

NOW.
THEREFORE, in consideration of the mutual and reciprocal obligations and undertakings hereinafter set forth, the parties agree
as follows:

 

1.                  
Novation in Settlement of Claims under the IC Agreement: The parties agree that the rights and obligations of SHC and Cutanogen
under the IC Agreement are hereby novated and superseded by the substitution of the following agreement with respect to the payment
of fees to SHC in respect of the acquisition of Cutanogen by Cambrex. 

    	138

    	 

    

a.      
Payments to SHC: Cutanogen, the Shareholders and Cambrex agree that Cambrex is authorized and agrees to deduct from each
Payment (as defined in the Cutanogen Agreement) and pay directly to SHC at 2900 Rocky Point Drive, Tampa, FL, 33607 (mailing address:
Post Office Box 31356, Tampa, FL, 33631-3356) or by wire transfer of immediately available funds to an account designated by SHC,
on Cutanogen's behalf, five percent (5.0%) of the amounts set forth in Article L § 1.2 of the Cutanogen Agreement if, when
and as each of the Payments are made to the Shareholders or their agent, as follows. For the avoidance of doubt, the portion of
each Payment payable to SHC shall be paid in U.S. currency in the amounts and as of the dates set forth below: 

 

                                            
i.                       
Within three (3) business days following the signing of this Agreement, Ten Thousand Dollars ($10,000) in U.S. Currency. 

 

                                           
ii.                       
At the Closing of the Cutanogen Agreement, Sixty-Five Thousand Dollars ($65,000) (the "Initial Payment"). 

 

                                         
iii.                       
Following the Closing Date (as defined in the Cutanogen Agreement), up to an additional Two Hundred Forty Thousand Dollars ($240,000)
in five (5) separate payments upon the achievement of certain milestones (each payment, a "Milestone Payment",
and collectively, the "Milestone Payments"), as follows:

 

1)                  
Not later than thirty (30) days after submission ("Milestone 1") to the U.S. Food and Drug Administration ("FDA")
of a "Humanitarian Device Exemption" application under 21 CFR Part 814 for the Product, Cambrex shall pay to SHC Thirty-Two
Thousand Five Hundred Dollars ($32,500); 

 

2)                  
Not later than thirty (30) days after approval ("Milestone 2") but the FDA of the aforementioned Product application,
Cambrex shall pay to SHC Thirty-Two Thousand Five Hundred Dollars ($32,500); 

 

3)                  
Not later than thirty (30) days after the first commercial sale ("Milestone 3") of the Product pursuant to the
aforementioned application, Cambrex shall pay to SHC Fifty Thousand Dollars ($50,000) or One Hundred Fifteen thousand Dollars
($115,000) if Milestones 1 and 2 have not been achieved or Eighty-Two Thousand Five Hundred Dollars ($82,500) if Milestone 1 has
been achieved but Milestone 2 has not been achieved or; 

 

4)                  
Not later than thirty (30) days after submission ("Milestone 4") to the FDA of a §510(k) application, a
Biologics License Application or a Pre-Market Approval application for the Product, Cambrex shall pay to SHC Fifty Thousand Dollars
($50,000); and 

 

5)                  
Not later than thirty (30) days after the approval ("Milestone 5") by the FDA of such §510(k) application,
Biologics License Application or Pre-Market Approval application, Cambrex shall pay to SHC Seventy-Five Thousand Dollars ($75,000).

    	139

    	 

    

2.                  
SHC Product Purchase Undertaking. While the parties acknowledge and agree that SHC cannot commit to purchasing the Product,
SHC represents that it intends to purchase from Cutanogen (or its successors or assigns), as clinical demand and budgetary considerations
permit, up to twenty (20) square meters of the Product during the first year commencing with the achievement of Milestone 1 or
Milestone 3, whichever occurs first (the "Initial Year"). Should SHC purchase any Product during the Initial Year, SHC's
cost for such Product during such year shall be the lesser of (i) if and for so long as the federal Food and Drug Administration's
("FDA") pricing restrictions for Humanitarian Use Devices or pursuant to a Humanitarian Device Exemption apply to commercial
sales of the Product, an amount equal to the allowable costs of research and development, fabrication, and distribution; or (ii)
if or to the extent that no FDA pricing restrictions apply to commercial sales of the Product, an amount no less favorable than
the lowest price paid by any third-party purchaser during the Initial Year other than the U.S. government. In the event of any
subsequent third-party sales (other than to the U.S. government) at a lower price than the price paid by SHC during the Initial
Year, prices paid by SHC for the remaining portion of the Initial Year, commencing as of the date of such third party sale, shall
be adjusted such that the price per square meter of Product paid by SHC for the remaining portion of the Initial Year is equal
to the lowest price per square meter of Product paid by third-party purchasers (other than the U.S. Government) during the Initial
Year. Should SHC purchase at least ten (l0) square meters of the Product during the Initial Year, Cutanogen and Cambrex shall
provide, at SHC's request, SHC with such sales data as may be reasonably necessary to enable SHC to audit compliance with this
"most favored nation" provision. SHC's right of audit under this Section 2 shall be exercisable (i) no more than twice
during the Initial Year and the six month period following the expiration of the Initial Year and (ii) no later than the expiration
of the six month period following the end of the Term. All such information shall be deemed to be the confidential information
of Cutanogen and Cambrex, and SHC shall not disclose such confidential information to any third party except to those employees,
consultants and other representatives of SHC who have a need to know such information for purposes of conducting the audit(s).
SHC and Cutanogen (or its successors or assigns) may renew the purchase undertaking set forth in this Section 2 for periods after
the Initial Year on such terms as are mutually agreed, including, without limitation. tenus governing favorable pricing. 

 

    	140

    	 

    

3.                  
SHC's Undertaking for :Multi-Site Clinical Trials of Product: Following the Closing, in the event that Cutanogen (or its
successors or assigns) chooses, at its sole discretion, to conduct site clinical trials of the Product at SHC, SHC shall conduct,
and Cutanogen (or its successors or assigns) shall pay SHC for, such trials at sites and upon terms and conditions as mutually
agreed. Payments to SHC shall include SHC's direct costs and indirect costs at a minimum of thirty percent (30%) of direct costs.
SHC and Cutanogen (or its successors, assigns or designee(s)) will enter into a research support agreement with regard to each
clinical trial in a form and with such terms and conditions as mutually agreed. 

 

4.                  
Licenses. SHC acknowledges and agrees as to SHC that the license agreement dated as of May 29, 1998, as an1ended, between
SHC and the University of Cincinnati as licensors and Cutanogen as licensee (the "License Agreement") will remain in
full force and effect as of and following the Closing. SHC further agrees that there are no liabilities as to SHC outstanding
as of the date hereof with respect to Cutanogen's obligations under such License Agreement. 

 

    	141

    	 

    

5.                  
Release of Cutanogen, the Shareholders and Cambrex: Except as hereafter provided, as to Carl G. Fischer, Jr., Richard J.
Kagan, John E. McCall, Kevin Yakuboff, and Glenn D.Warden (the "Designated Shareholders") and subject to Section
7 hereof, in consideration of the mutual covenants and dismissals of claims herein, the receipt and sufficiency of which is hereby
acknowledged, SHC, on behalf of itself, its officers, directors, shareholders. partners, members. subsidiaries, parents, divisions,
agents, successors, and assigns, do hereby forever release. requite. and discharge Cutanogen, the Shareholders and Cambrex and
its and their respective heirs, executors, administrators, personal representatives and assigns, officers, directors, shareholders,
partners, members, subsidiaries, parents, divisions, attorneys, agents, successors, and assigns (collectively, the "Cutanogen
and Cambrex Releasors") from any and all suits, debts, accounts, charges, claims, demands, judgments, actions, causes
of action, damages, expenses, costs, attorneys' fees, and liabilities of any kind whatsoever, whether known or unknown, suspected
or unsuspected, vested or contingent, in law or in equity or otherwise, which SHC has ever had, now has, or may have against the
Cutanogen and Cambrex Releasors for or on account of any matter, cause or thing whatsoever arising out of or relating to (i) the
IC Agreement, the acquisition of Cutanogen by Cambrex and the SHC/Cutanogen Disputes, or (ii) a Shareholder's ownership, purchase
or sale of the stock of Cutanogen or breach of any intellectual property or ethical policy of SHC; provided, however, that no
Designated Shareholder shall be released, requited or discharged from any claim arising out of such Designated Shareholder's ownership,
purchase or sale of the stock of Cutanogenor breach of any intellectual property or ethical policy of SHC and/or any claim for
disgorgement to SHC by the Designated Shareholders of their pro rata share of the additional $14,000 consideration if and as received
by the Designated Shareholders resulting from SHC's compromise of the SHC/Cutanogen Disputes. 

    	142

    	 

    

6.                  
Release and Indemnification of SHC: In consideration of the mutual covenants and dismissals of claims herein, the receipt
and sufficiency of which is hereby acknowledged, the Cutanogen and Cambrex Releasors do hereby forever release, requite, and discharge
SHC and its officers, directors, shareholders, partners, members, subsidiaries, parents, divisions, agents. successors, and assigns
from any and all suits. debts, accounts. charges, claims, demands, judgments, actions, causes of action. damages, expenses, costs,
attorneys' fees, and liabilities of any kind whatsoever, whether known or unknown, suspected or unsuspected, vested or contingent,
in law or in equity or otherwise, which the Cutanogen and Cambrex Releasors have ever had, now have, or may have against SHC for
or on account of any matter, cause or thing whatsoever arising out of or relating to the IC Agreement, the acquisition of Cutanogen
by Cambrex and the SHC/Cutanogen Disputes or the License Agreement insofar as any such matter, cause or thing arises out of or
relates to that certain Institution Research Agreement dated June 20, 2005 between The Proctor & Gamble Company, Children's
Hospital Medical Center and the Skin Sciences Institute. Steven T. Boyce ("Boyce") shall indemnify, defend and
hold SHC and its Affiliates and each of their respective agents. employees, officers, trustees and directors (the "SHC Indemnitees")
harmless from and against any liability, damage, loss, cost or expense (including reasonable attorneys fees) arising from or occurring
as a result of any claim whatsoever regardless of whether such claim sounds in tort, contract, strict liability, products liability
or any other legal theory against the SHC Indenmitees arising out of or relating to that certain Institution Research Agreement
dated June 20, 2005, between The Proctor & Gamble Company, Children's Hospital Medical Center and the Skin Sciences Institute.
This undertaking to indemnify the SHC Indemnitees is made by Boyce in his individual capacity and not on behalf of SHC as an employee
or agent and Boyce waives any claim for coverage under any SHC indemnification that may otherwise be available to employees of
SHC. Boyce expressly waives his right to discharge the obligation of indemnification to SHC as set forth herein under any of the
United States Bankruptcy laws and the expressly agrees to not list or include the indebtedness to the SHC as set forth herein
on any Chapter 7 or Chapter 13 Bankruptcy that he may file, it being the express intent of the parties that said indebtedness
not be dischargeable under the Bankruptcy laws of the United States; and in the event that the waiver of dischargeability is deemed
unenforceable, Boyce agrees to enter into a post-petition reaffirmation of this indemnification obligation pursuant to 11 U.S.C.
§ 524(c) and expressly waives the right to assert that this reaffirmation undertaking is avoidable as an executory contract.

    	143

    	 

    

7.                  
Survival: The rights, obligations and provisions of Paragraphs One (1), Two (2), Three (3) and Four (4),the proviso in
Paragraph Five (5)(ii), and the indemnification obligation in Paragraph Six (6) of this Agreement expressly survive the releases
set forth herein.

 

8.                  
Entire Agreement, Governing Law: This Agreement constitutes the entire Agreement between the parties with regard to the
matters herein set forth. If any provision of this Agreement is held to be invalid, then the remainder of the Agreement shall
remain in full force and effect and shall, in all respects, be interpreted, enforced and governed under the laws of the State
of Ohio. Any changes in this Agreement, whether by additions, deletions, Waivers, amendments or modifications, may be made only
in writing and signed by all parties.

 

9.                  
Acknowledgment of Review: The parties to this Agreement each represent and agree that they have carefully read, reviewed
and consulted with legal counsel regarding the terms and conditions of this Agreement, that they understand the terms of this
Agreement, that no promise, assurance, commitment or inducement has been made or offered to him, her or it except as set forth
in this Agreement, that he, she or it is executing this Agreement without reliance upon any statement or representation of the
person or party released, except as set forth herein, and that he. she or it intends to and is competent to be bound by this Agreement.

 

10.               
Confidentiality: The parties agree that the terms of this Agreement will be kept confidential, and will not be shared with
any third parties other than its and their respective parents, subsidiaries, principals, agents, employees, accountants, attorneys,
reinsurers, regulators, representatives and any other individuals or entities that are entitled to receive this information by
law or regulation, without either a lawful subpoena (or other process) or the written consent of the parties.

 

11.               
Requisite Authority: Each person signing this Agreement on behalf of SHC, Cutanogen and Cambrex represents and warrants
that he has full authority to do so and represents and warrants that said party has not assigned or intended to assign any claims
being released under this Agreement to any other person or entity. This Agreement will be executed in several counterparts, each
of which will be deemed an original. 

    	144

    	 

    

IN
WITNESS WHEREOF, Shriners Hospitals for Children, Cutanogen Corporation, the Shareholders and Cambrex Bio Science Walkersville,
Inc., have executed this Settlement Agreement and Release as of the Effective Date.

 

	Shriners
    Hospitals for Children
	By:/s/Ralph
                                                          W Semb

        RALPH
        W. SEMB

	 Its:
    President

 

	Cutanogen
    Corporation
	 By:/s/Steven
    T Boyce
	Its:President

 

	Cambrex
    Bio Science Walkersville, Inc.
	 By:/s/Shawn
    P. Cavanagh
	Its:
    Senior Vice President

    	145

    	 

    

 

[COUNTERPART
SIGNATURE PAGE TO THE

SETTLEMENT
AGREEMENT AND RELEASE]

 

Shareholders:

 

	/s/
                                                                       Peter Amstein

        Peter
        Amstein

	/s/
                                                          Steven T. Boyce

        Steven
        T. Boyce

	/s/
                                                          Edward J. Carl

        Edward
        J. Carl

	/s/
                                                          Kevin J. Eastace

        Kevin
        J. Eastace

	/s/
                                                          Carl G. Fischer, Jr.

        Carl
        G. Fischer, Jr.

	/s/
                                                          Patricia B. Goodman

        Patricia
        B. Goodman

	/s/
                                                          Ken Green

        Ken
        Green

	/s/
                                                          Jay Hay

        Jay
        Hay

	/s/
                                                          Erna Hoffberger

        Erna
        Hoffberger

	/s/
                                                          Richard J. Kagan

        Richard
        J. Kagan

	/s/
                                                          Lisa Kagan

        Lisa
        Kagan

	/s/
                                                          Albert L. Klosterman

        Albert
        L. Klosterman

 

    	146

    	 

    

 

[COUNTERPART
SIGNATURE PAGE TO THE

SETTLEMENT
AGREEMENT AND RELEASE]

 

	/s/
                                                                       Jack W. Martz

        Jack
        W. Martz

	/s/
                                                          John E. McCall

        John
        E. McCall

	/s/
                                                          Tony L. Shipley

        Tony
        L. Shipley

	/s/
                                                          Kevin Yakuboff

        Kevin
        Yakuboff

	/s/
                                                          Mark J. Buch

        Mark
        J. Buch

	/s/
                                                          Glenn D. Warden

        Glenn
        D. Warden

	/s/
                                                          William T. Nuerge

        William
        T.  Nuerge

 

	THE
    EBTC Foundation
	 By:/s/
    President & Chairman
	Its:
    President & Chairman

 

    	147

    	 

    

 

EXHIBIT
A

 

INDEPENDENT
CONTRACTOR AGREEMENT 

 

See
Attached.

    	148

    	 

    

 

INDEPENDENT
CONTRACTOR AGREEMENT

 

BETWEEN
SHRINERS HOSPITALS FOR CHILDREN AND CUTANOGEN CORPORATION

 

THIS
AGREEMENT made as of this 1st day of September, 2003, by and between Shriners Hospitals for Children,
a corporation of the State of Colorado having a place of business at 2900 Rocky Point Drive, Tampa, FL 33607 (hereinafter "Shriners"),
and Cutanogen Corporation (hereinafter referred to as "CC") having an office at: 3130 Highland Avenue, Suite 3100, Cincinnati,
OH 45219-2374.

 

WHEREAS,
SHRINERS desires to enter into an independent contractor agreement with CC to facilitate greater availability of autologous cultured
skin substitutes for patients of the Shriners Hospitals for Children (SHC), and all patients with burn injuries greater than 50%
of the total body surface area. Shriners will seek to find a corporate partner (licensee, investor, acquirer or other joint venture
partner) for CC. SHC's efforts in finding a corporate partner, licensee or investor are not exclusive and CC should continue with
its independent efforts to achieve the same purpose. SHC and CC will identify to each other prospective partners or investors
to explore synergies and prevent duplication of efforts on a regular basis, through monthly progress reports or other similar
approach. It is therefore mutually agreed by and between the parties hereto as follows:

 

1                    
TERM The term of this Agreement shall commence on Sept.1, 2003(the "Commencement Date") and expire
three years from such date, unless sooner terminated or renewed as provided hereunder. 

 

2                    
DUTIES Shriners shall use commercially-reasonable efforts to identify, follow-up with and negotiate with companies
or entities that have a potential need for, or interest in CC's technology or business. However, Shriners cannot guarantee it
will produce results with any such companies or entities. Prior to approaching any company or entity, Shriners will inform CC
as to the company or entity's name and line of business to ensure that the potential prospect is not already in negotiations with
CC. CC will confirm, bye-mail, whether or not Shriners should proceed with introducing its prospect to CC. Shriners will complete
a Confidential Disclosure Agreement (CDA) with each company or entity before discussion of proprietary information or the confidential
business plan of CC. Shriners will provide a copy of each CDA to CC to identify the company or entity as a business prospect.
At the sole discretion of Shriners, Shriners will introduce some or all of these companies or entities to CC. As part of its duties,
Shriners will also follow-up with potential prospects identified by CC and provided to Shriners. The acceptance of terms of any
negotiations conducted by Shriners on behalf of CC will be at the sole discretion of CC. 

 

3                    
COMPENSATION During the term of this Agreement, Shriners shall be paid a finder's fee of 10% of all consideration
received by CC from any companies or entities that CC has either confirmed by email or requested that Shriners follow-up with,
pursuant to section 2 of this Agreement that Shriners should introduce to CC, within ten days of the receipt of any consideration
by CC from these parties. In the event that CC receives compensation from a Shriners-introduced or followed-up company or entity
within one year after this Agreement has been terminated, then Shriners will still receive the same consideration it would have
normally received had this Agreement been in effect at that time. 

    	149

    	 

    

 

4                    
CONFIDENTIAL INFORMATION

 

a.      
Shriners may have already acquired and will acquire information and knowledge about the confidential affairs of CC (for this purpose
including without limitation confidential information with respect to the CC's customer lists, technologies, business methodology,
business techniques, promotional materials and information, and other similar matters treated by CC as confidential (the "Confidential
Information")). Accordingly, Shriners covenants and agrees that during the term of this agreement and thereafter, Shriners
shall not, without the prior written consent of CC, disclose to any person, other than a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Shriners of Shriners' duties hereunder, any Confidential Information
obtained by Shriners while providing services to CC under this Agreement. The obligation of confidentiality shall not apply to
the following: 

 

                                
i.            information at or after such time that it is or becomes publicly
available through no fault of Shriners; 

 

                               
ii.            information that is already independently known to Shriners
as shown by prior written records; 

 

                             
iii.            information at or after such time that is disclosed to
Shriners on a non- confidential basis by a third party with the legal right to do so; or 

 

                             
iv.            information required to be released by any governmental
entity with jurisdiction, provided that Shriners notifies CC prior to making such release of information. 

 

b.      
Shriners shall deliver to CC or its designee at the termination of this Agreement all CC data, correspondence, memoranda, notes,
records, product compositions, and other documents and all copies thereof, made, composed or received by Shriners, solely or jointly
with others, that are in Shriners' possession, custody, or control at termination and that are related in any manner to the past,
present, or anticipated business or any member of CC or one its subsidiaries. In this regard, Shriners hereby grants and conveys
to CC all right, title, and interest in and to, including without limitation, the right to possess, print, copy, and sell or otherwise
dispose of, any reports, records, papers, summaries, photographs, drawings or other documents, and writings, and copies, abstracts
or summaries thereof, that may be prepared by Shriners or under its direction or that may come into his possession in any way
during the term of this Agreement that relate in any manner to the past, present or anticipated business of CC. 

    	150

    	 

    

 

5                    
EXPENSES CC will not be responsible for any expenses incurred by Shriners in connection with performing
their duties as an independent consultant under this Agreement. Shriners will not be responsible for any expenses incurred
by CC in connection with performing their duties under this Agreement. 

 

6                    
TERMINATION

a.                  
Either party may terminate this Agreement for any reason by giving the other party thirty (30) days written notice.

 

b.                  
SHRINERS and CC each shall also have the right to terminate this Agreement immediately "For Cause". which shall include,
but not be limited to, fraud, breach of fiduciary duty, conviction of a crime or like conduct. 

 

7                    
ENTIRE AGREEMENT: SURVIVAL 

 

a.                  
This Agreement contains the entire agreement between the parties with respect to the transactions contemplated herein and supersedes,
effective as of the date hereof, any prior agreement or understanding between SHRINERS and CC. The unenforceability of any provision
of this Agreement shall not affect the enforceability of any other Provision. This Agreement, or any waiver, change, discharge
or modification as sought. may not be amended except by an agreement in writing signed by CC and SHRINERS. Waiver of or failure
to exercise any rights provided by this Agreement and in any respect shall not be deemed a waiver of any further or future rights.
This agreement shall not in any way affect the rights or obligations of either party under the License Agreement between Cutanogen
Corporation, University of Cincinnati and· Shriners Hospitals for Children dated August 24, 1998. 

 

b.                  
The provisions of Sections 4, 7, 10 and 11 shall survive the termination of this Agreement. 

 

8                    
ASSIGNMENT This Agreement shall not be assigned by either party to third parties. 

 

9                    
GOVERNING LAW This Agreement and all the amendments hereof, and waivers and consents with respect thereto shall
be governed by the laws of the State of Florida, without regard to the conflicts of laws principles thereof and the parties agree
that the jurisdiction shall be in Hillsborough County, Florida.

 

10                
NOTICE. All notices, responses, demands or other communications under this Agreement shall be in writing and shall
be deemed to have been given when: 

 

a.                  
Delivered by hand; 

 

b.                  
Sent by fax (with receipt confirmed), provided that a copy is mailed by registered or certified mail, return receipt requested;
or, 

 

c.                   
Received by the addressee as sent be express delivery service (receipt requested) in each case to the appropriate addresses, and
fax numbers as the party may designate to itself by notice to the other parties: 

 

                                            
i.                       
If to SHRINERS HOSPITALS FOR CHILDREN:

 

	Shriners
    Hospitals for Children, 2900 Rocky Point Drive, Tampa, FL 33607
	Attention:
    Managing Attorney
	Fax:
    813-281-0943

 

                                           
ii.                       
If to CUTANOGEN CORPORATION:

 

	3130
    Highland Avenue, Suite 3100, Cincinnati, OH 45219-2374
	Attention:
    Steven T. Boyce, Ph.D., President
	Fax:
    513-221-1891

 

    	151

    	 

    

 

11                
SEVERABILITY Should any part of this Agreement for any reason be declared invalid by a court of competent jurisdiction,
such decision shall not affect the validity of any remaining portion, which remaining provisions shall remain in full force and
effect as if this Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention
of the parties that they would have executed the remaining portions of this Agreement without including any such part, parts or
portions which may, for any reason, be hereafter declared invalid. 

 

IN
WITNESS WHEREOF, the undersigned have executed this agreement as of the day and year first above written.

 

	SHRINERS
    HOSPITALS FOR CHILDREN
	By:
                                                          /s/Ralph W. Semb

        President

	 Date:
    10/9/03

 

	CUTANOGEN
    CORPORATION
	By:
                                                          /s/Steven T. Boyce

        Steven
        T. Boyce

        President

	 Date:09/26/03

    	152

    	 

    

Exhibit
I – Manufacturing Agreement

    	153

    	 

    

MANUFACTURING
SERVICES AGREEMENT

 

This
Manufacturing Services Agreement (the “Agreement”) is made as of [INSERT DATE], (the “Effective Date”)
between Lonza Walkersville, Inc., a Delaware corporation having its principal place of business at 8830 Biggs Ford Road, Walkersville,
Maryland 21793 (“LWI”), and [NAME], [a/an] [State of formation, if an entity] [corporation / partnership / limited
liability company / limited liability partnership / individual], having an [office / address] at [address] (“CLIENT”)
(each of LWI and CLIENT, a “Party” and, collectively, the “Parties”).

 

RECITALS

 

A.LWI
operates a multi-client production facility located at 8830 Biggs Ford Road, Walkersville, Maryland 21793 (the “Facility”).

B.CLIENT
desires to have LWI produce a product containing human cells and intended for therapeutic use in humans, and LWI desires to produce
such product.

C.CLIENT
desires to have LWI conduct work according to individual Statement of Work, as further defined in Section 1.32

 below.

NOW, THEREFORE, in consideration of the foregoing
and the mutual promises and covenants hereinafter set forth, LWI and CLIENT, intending to be legally bound, hereby agree as follows: 

 

AGREEMENT

1.                 
Definitions

When
used in this Agreement, capitalized terms will have the meanings as defined below and throughout the Agreement. Unless the context
indicates otherwise, the singular will include the plural and the plural will include the singular.

 

1.1.             
“Acceptance Period” shall have the meaning set forth in Section 5.2..

1.2.             
“Affiliate” means, with respect to either Party, any other corporation or business entity that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Party. For purposes
of this definition, the term “control” and, with correlative meanings, the terms “controlled by” and “under
common control with” means direct or indirect ownership of more than fifty percent (50%) of the securities or other ownership
interests representing the equity voting stock or general partnership or membership interest of such entity or the power to direct
or cause the direction of the management or policies of such entity, whether through the ownership of voting securities, by contract,
or otherwise. 

1.3.             
“Batch” means a specific quantity of Product that is intended to have uniform character and quality, within
specified limits, and is produced according to a single manufacturing order during the same cycle of manufacture

1.4.             
“Batch Record” means the production record pertaining to a Batch.

1.5.             
“cGMP” means the regulatory requirements for current good manufacturing practices promulgated by the FDA under
21 CFR Parts 210 and 211, as amended from time to time.

    	154

    	 

    

 

1.6.             
“Change Order” has the meaning set forth in Section 2.2.

1.7.             
“CLIENT Development Materials” has the meaning set forth in Section 2.3.

1.8.             
“CLIENT Inventions” means any know-how or inventions, whether or not patentable, conceived, developed or reduced
to practice by CLIENT on or before the Effective Date.

1.9.             
“CLIENT Materials” means the CLIENT Development Materials and the CLIENT Production Materials. 

1.10.          
“CLIENT Personnel” has the meaning set forth in Section 4.8.1.

1.11.          
“CLIENT Production Materials” has the meaning set forth in Section 4.2.

1.12.          
“Commencement Date” means the date set forth in the Statement of Work, based on a Draft Plan, for the commencement
of the production of the Product.

1.13.          
“Confidential Information” has the meaning set forth in Section 10.1.

1.14.          
“Disapproval Notice” shall have the meaning set forth in Section 5.2.2.

1.15.          
“Draft Plan” shall have the meaning set forth in Section 4.1.

1.16.          
 “FDA” means the U.S. Food and Drug Administration, and any successor agency thereof.

1.17.          
“First Statement of Work” has the meaning set forth in the definition of Statement of Work.

1.18.          
“Intellectual Property” means all worldwide patents, copyrights, trade secrets, know-how and all other intellectual
property rights, including all applications and registrations with respect thereto, but excluding all trademarks, trade names,
service marks, logos and other corporate identifiers.

1.19.          
“LWI Inventions” means any know-how, media, assays, methods or other inventions, whether or not patentable,
conceived, developed or reduced to practice by LWI: (a) on or before the Effective Date; or (b) in connection with the performance
of the Statement of Work or the Draft Plan.

1.20.          
“LWI Operating Documents” means the standard operating procedures, standard manufacturing procedures, raw material
specifications, protocols, validation documentation, and supporting documentation used by LWI, such as environmental monitoring,
for operation and maintenance of the Facility and LWI equipment used in the process of producing the Product, excluding any of
the foregoing that are unique to the manufacture of Product.

    	155

    	 

    

 

1.21.          
“LWI Parties” has the meaning set forth in Section 15.2.

1.22.          
“Master Production Record” means the documentation developed by LWI that contains a detailed description of
a Process and any other instructions to be followed by LWI in the production of a Product.

1.23.          
“Materials” means all raw materials and supplies to be used in the production of a Product.

1.24.          
“Process” means the manufacturing process for a Product developed by LWI pursuant to the terms of this Agreement.

1.25.          
“Product” has the meaning set forth in a Statement of Work.

1.26.          
“Product Warranties” means those warranties as specifically stated in Section 5.2.2.

1.27.          
“Production Term” shall have the meaning set forth in Section 4.4.

1.28.          
“Quality Agreement” means the Quality Agreement entered into by the Parties simultaneously with the execution
hereof relating to a Product.

1.29.          
“Regulatory Approval” means the approval by the FDA to market and sell the Product in the United States.

1.30.          
“SOP” means a standard operating procedure.

1.31.          
“Specifications” means the Product specifications set forth in the Statement of Work or as modified by the
Parties in connection with the production of a particular Batch of Product hereunder.

1.32.          
“Statement of Work” means a plan to develop a Process or Product that is attached hereto as Appendix A or later
becomes attached through an amendment by the Parties. The first Statement of Work, which is attached hereto, is numbered Appendix
A-1 and is hereby incorporated and made a part of this Agreement (the “First Statement of Work”). It is contemplated
that each separate project shall have its own Statement of Work. As each subsequent Statement of Work is agreed to by the Parties,
each shall state that it is to be incorporated and made a part of this Agreement and shall be consecutively numbered as A-2, A-3,
etc.

1.33.          
“Technology Transfer” means the transfer of documentation, specifications, and production process by CLIENT
to LWI for the development of the Master Production Record for the manufacturing of the Product specifically for the CLIENT.

1.34.          
“Third Party” means any party other than LWI, CLIENT or their respective Affiliates.

    	156

    	 

    

 

2.                 
Statements of Work - Process and Product Development; Technology Transfer; Process or Product
Manufacture

2.1             
Statement of Work. Prior to performing any Process or Product development, Technology Transfer, or Process or Product manufacture,
the Parties will collaborate to develop a Statement of Work, describing the activities to be performed by the Parties, or to be
subcontracted by LWI to Third Parties. Once agreed to by the Parties, the Statement of Work shall be executed by each of the Parties
and appended hereto as part of Appendix A. In the event of a conflict between the terms and conditions of this Agreement and any
Statement of Work, the terms and conditions of this Agreement shall control.

2.2             
Modification of Statement of Work. Should CLIENT want to change a Statement of Work or to include additional services to be
provided by LWI, CLIENT may propose to LWI an amendment to the Statement of Work with the desired changes or additional services
(“Change Order”). If LWI determines that it has the resources and capabilities to accommodate such Change Order,
LWI will prepare a modified version of the Statement of Work reflecting such Change Order (including, without limitation, any
changes to the estimated timing, estimated charges or scope of a project) and will submit such modified version of the Statement
of Work to CLIENT for review and comment. The modified Statement of Work shall be binding on the Parties only if it refers to
this Agreement, states that it is to be made a part thereof, and is signed by both Parties. Whereafter such modified version of
the Statement of Work will be deemed to have replaced the prior version of the Statement of Work. Notwithstanding the foregoing,
if a modified version of the Statement of Work is not agreed to by both Parties, the existing Statement of Work shall remain in
effect.

2.3             
CLIENT Deliverables. Within the time period specified in a Statement of Work, CLIENT will provide LWI with (a) the materials
listed in the Statement of Work for which CLIENT is responsible for delivering to LWI, and any handling instructions, protocols,
SOPs and other documentation necessary to maintain the properties of such materials for the performance of the Statement of Work,
and (b) any protocols, SOPs and other information and documentation in possession or control of CLIENT and necessary for the performance
of the Statement of Work, and for the preparation of the Master Production Record in conformance with cGMP, including, without
limitation, process information, SOPs, development data and reports, quality control assays, raw material specifications (including
vendor, grade and sampling/testing requirements), product and sample packing and shipping instructions, and product specific cleaning
and decontamination information, (collectively, the “CLIENT Development Materials”).

2.4             
Performance by LWI. Subject to the provision by CLIENT of the CLIENT Development Materials pursuant to Section 2.3

, LWI will use commercially reasonable efforts to
perform, directly or, subject to the terms of the Statement of Work or approval by CLIENT (such approval not to be unreasonably
withheld), through a Third Party contractor, the work described in a Statement of Work in a professional and workmanlike manner
in accordance with the terms of this Agreement. LWI will use commercially reasonable efforts promptly to notify CLIENT of any
material delays that arise during the performance of the Statement of Work.

    	157

    	 

    

 

3.                 
Technology Transfer

3.1Based
on the information provided by CLIENT and including process changes developed by LWI pursuant to any applicable Statement of Work,
LWI will prepare the Master Production Record for the Process in accordance with the schedule set forth in the Statement of Work.
CLIENT will inform LWI of any specific requirements CLIENT may have relating to the Master Production Record, including, without
limitation, any information or procedures CLIENT wishes to have incorporated therein. If LWI intends to include in the Master
Production Record the use of any assay, medium, or other technology that is not commercially available, LWI will inform CLIENT
of such intention and the Parties will meet to discuss and attempt to agree in good faith on the terms of use of such non-commercially
available materials or technology in the Process.

3.2CLIENT
will cooperate with LWI to assist LWI to develop the Master Production Record and Process, including, without limitation, by providing
LWI with additional information and procedures as may be required to create the Master Production Record, Process, and/or any
of the following: (i) manufacturing process information, SOPs, development reports, (ii) quality control assays, (iii) raw material
specifications (including vendor, grade and sampling/testing requirements), (iv) Product and sample packing and shipping instructions,
(v) Product specific cleaning and decontamination information.

3.3LWI
will deliver a draft version of the Master Production Record to CLIENT for its review and approval in accordance with the schedule
set forth in the Statement of Work. CLIENT will notify LWI in writing of any objections it has to the draft Master Production
Record, and upon such notification, representatives of LWI and CLIENT will meet promptly to resolve such objections. Upon CLIENT’s
written acceptance of the draft Master Production Record, or in the event that CLIENT does not submit a written notice setting
forth CLIENT’s objections to the draft Master Production Record within ten (10) days following receipt of such draft by
CLIENT, such draft will be deemed approved by CLIENT.

3.4The
Process, Master Production Record, Specifications, and any improvements or modifications thereto developed during the term of
this Agreement, but excluding any LWI Operating Documents, LWI Inventions or LWI Confidential Information included in any of the
foregoing, will be deemed CLIENT Confidential Information and subject to the provisions set forth in Article 10

. CLIENT shall be permitted to use the Process and/or
the Master Production Record to manufacture and sell Product; provided, however, that if the Process and/or the Master Production
Record incorporates or contains any LWI Intellectual Property or LWI Confidential Information, prior to any disclosure of such
LWI Intellectual Property or LWI Confidential Information to, or use by, a Third Party manufacturer, CLIENT shall obtain LWI’s
written consent to such disclosure.

    	158

    	 

    

 

4.                 
Manufacture Of Product; Order Process; Deliveries

4.1             
Draft Plan. Together with the draft version of the Master Production Record described in Section 3.3 above, LWI will deliver
to CLIENT for review and comment, a proposed draft plan describing the activities to be performed by LWI, or to be subcontracted
by LWI to Third Parties, in the production of a Product (the “Draft Plan”). Once LWI delivers to CLIENT the
proposed Draft Plan, the parties will meet to decide whether to issue a new Statement of Work pursuant to Section 2.1

, or to modify an existing Statement of Work pursuant
to Section 2.2

, based on that Draft Plan and any agreed upon modifications.

4.2             
CLIENT Deliverables. Within any time period specified in the Draft Plan and agreed to in any applicable Statement of Work,
CLIENT will provide LWI with (a) the materials listed in the Statement of Work required to be supplied by CLIENT for the production
of the Product, and any handling instructions, protocols, SOPs and other documentation necessary to maintain the properties of
such materials for the performance of the Draft Plan (collectively, the “CLIENT Production Materials”). 

4.3             
Commencement Date. The Statement of Work based on a Draft Plan will include a Commencement Date agreed upon by the Parties.

4.4             
Manufacture by LWI. During the time period specified in any Statement of Work during which Product will be manufactured (the
“Production Term”), LWI will use commercially reasonable efforts to manufacture, package, ship, handle quality
assurance and quality control for the Product, all as set forth in the Statement of Work, and to deliver to CLIENT the quantities
of Product requested by CLIENT in the Statement of Work, all in accordance with the terms set forth in Section 4.5

below.

4.5             
Packaging and Shipping. LWI will package and label the Product for shipment in accordance with the Master Production Record
and LWI’s standard practices in effect at the time of performance by LWI. LWI will ship the Product FOB Shipping Point delivered
at the Facility to a common carrier designated by CLIENT to LWI in writing not less than ten days prior to the applicable delivery
date unless otherwise agreed to in a Statement of Work. CLIENT will provide to LWI its account number with the selected carrier
and will pay for all shipping costs in connection with each shipment of Product. Each shipment will be accompanied by the documentation
listed in the Draft Plan. LWI will use commercially reasonable efforts to deliver each shipment of Product to CLIENT on the requested
delivery date for such shipment. LWI will promptly notify CLIENT if LWI reasonably believes that it will be unable to meet a delivery
date. CLIENT shall be required to take delivery of a Batch of Product within thirty (30) days after acceptance of such Batch in
accordance with Section 5.2 (the “Delivery Period”).

4.6             
Quality Agreement. Upon the decision to manufacture a Product according to a Draft Plan, the Parties shall enter into a separate
Quality Agreement, in the form attached hereto, setting forth the terms for Product quality, quantity, price, and any other terms
necessary for such agreements. Such Quality Agreement shall be separately appended to this Agreement. 

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4.7             
Records. LWI will maintain accurate records for the production of the Product, as required by applicable laws and regulations.
LWI will retain possession of the Master Production Record, all Batch Records and LWI Operating Documents, and will make copies
thereof available to CLIENT upon CLIENT’s request and at CLIENT’s expense. LWI Operating Documents will remain LWI
Confidential Information. CLIENT will have the right to use and reference any of the foregoing in connection with a filing for
Regulatory Approval of the Product or as otherwise authorized by the Agreement. 

4.8             
CLIENT Access. 

4.8.1       
CLIENT’s employees and agents (including its independent contractors) (collectively, “CLIENT Personnel”)
may participate in the production of the Product only in such capacities as may be approved in writing in advance by LWI. CLIENT
Personnel working at the Facility are required to comply with LWI’s Operating Documents and any other applicable LWI facility
and/or safety policies. For the avoidance of doubt, CLIENT Personnel may not physically participate in the production or manufacture
of any Product that may be used in or on humans.

4.8.2       
CLIENT Personnel working at the Facility will be and remain employees of CLIENT, and CLIENT will be solely responsible for
the payment of compensation for such CLIENT Personnel (including applicable Federal, state and local withholding, FICA and other
payroll taxes, workers’ compensation insurance, health insurance, and other similar statutory and fringe benefits). CLIENT
covenants and agrees to maintain workers’ compensation benefits and employers’ liability insurance as required by
applicable Federal and Maryland laws with respect to all CLIENT Personnel working at the Facility. 

4.8.3       
CLIENT will pay for the actual cost of repairing or replacing to its previous status (to the extent that LWI determines, in
its reasonable judgment, that repairs cannot be adequately effected) any property of LWI damaged or destroyed by CLIENT Personnel,
provided CLIENT shall not be liable for repair or replacement costs resulting from ordinary wear and tear.

4.8.4       
CLIENT Personnel visiting or having access to the Facility will abide by LWI standard policies, operating procedures and the
security procedures established by LWI. CLIENT will be liable for any breaches of security by CLIENT Personnel. In addition, CLIENT
will reimburse LWI for the cost of any lost security cards issued to CLIENT Personnel, at the rate of $50 per security card. All
CLIENT Personnel will agree to abide by LWI policies and SOPs established by LWI, and will sign an appropriate confidentiality
agreement.

4.8.5       
CLIENT will indemnify and hold harmless LWI from and against any and all losses, damages, liabilities, costs and expenses
(including reasonable attorneys’ fees and expenses) arising out of any injuries suffered by CLIENT Personnel while at the
Facility or elsewhere, except to the extent caused by the gross negligence or willful misconduct on the part of any LWI Party.

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4.9             
Disclaimers. CLIENT acknowledges and agrees that LWI Parties will not engage in any Product refinement or development of the
Product, other than as expressly set forth in this Agreement and the Statement of Work. CLIENT acknowledges and agrees that LWI
Parties have not participated in the invention or testing of any Product, and have not evaluated its safety or suitability for
use in humans or otherwise.

5.                 
Product Warranties; Acceptance And Rejection Of Products

5.1             
Product Warranties. LWI warrants that any Product manufactured by LWI pursuant to this Agreement, at the time of delivery
pursuant to Section 4.5

: (a) conforms to the Specifications; (b) was manufactured
in accordance with the Master Production Record; and (c) was manufactured in accordance with cGMP.

5.2             
Approval of Shipment. 

5.2.1       
When the Product ordered by CLIENT is ready for delivery, LWI will notify CLIENT and supply CLIENT with the required documentation
set forth in the Draft Plan. 

5.2.2       
Within ten (10) calendar days after CLIENT’s receipt of such documentation regarding such Product (the “Acceptance
Period”), Client shall determine by review of such documentation whether or not the given Batch conforms to the product
warranties set forth in Section 5.1 above (“Product Warranties”). If CLIENT asserts that the Product does not
comply with the Product Warranties set forth in Section 5.1

above, CLIENT will deliver to LWI, in accordance with
the notice provisions set forth in Section 17.4 hereof, written notice of disapproval (the “Disapproval Notice”)
of such Product, stating in reasonable detail the basis for such assertion of non-compliance with the Product Warranties. If a
valid Disapproval Notice is received by LWI during the Acceptance Period, then LWI and CLIENT will provide one another with all
related paperwork and records (including, but not limited to, quality control tests) relating to both the production of the Product
and the Disapproval Notice. If a valid Disapproval Notice is not received during the Acceptance Period, the Product will be deemed
accepted and ready for shipment. Upon acceptance, the Product shall be delivered to CLIENT, and CLIENT shall accept delivery thereof,
within 10-days after such acceptance. Title and risk of loss to such Product shall pass to CLIENT at the time of delivery to the
common carrier pursuant to Section 4.5.

5.3             
Dispute Resolution. LWI and CLIENT will attempt to resolve any dispute regarding the conformity of a shipment of Product with
the Product Warranties. If such dispute cannot be settled within 30 days of the submission by each Party of such related paperwork
and records to the other Party, and if the Product is alleged not to conform with the Product Warranties set forth in Section
5.1

(a), then CLIENT will submit a sample of the Batch
of the disputed shipment to an independent testing laboratory of recognized repute selected by CLIENT and approved by LWI (such
approval not to be unreasonably withheld) for analysis, under quality assurance approved procedures, of the conformity of such
shipment of Product with the Specifications. The costs associated with such analysis by such independent testing laboratory will
be paid by the Party whose assessment of the conformity of the shipment of Product with the Specifications was mistaken.

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5.4             
Remedies for Non-Conforming Product. 

5.4.1       
In the event that the Parties agree, or an independent testing laboratory determines, pursuant to Section 5.3, that a Batch
of Product materially fails to conform to the Product Warranties due to the failure of: (a) LWI personnel properly to execute
the Master Production Record, (b) LWI personnel to comply with cGMP, or (c) the Facility utilities, then, at CLIENT’s request,
LWI will produce for CLIENT sufficient quantities of Product to replace the non-conforming portion of such Batch of Product (the
“Production Rerun”), in accordance with the provisions of this Agreement and at no additional cost to CLIENT.

5.4.2       
In the event that the Parties agree, or an independent testing laboratory determines, pursuant to Section 5.3, that a Batch
of Product materially fails to conform to the Product Warranties for any reason other than as set forth in Section 5.4.1

, then LWI shall have no liability to CLIENT with
respect to such Batch and LWI will, at CLIENT’s request, produce for CLIENT a Production Rerun at CLIENT’s expense.

5.4.3       
CLIENT acknowledges and agrees that its sole remedy with respect to the failure of Product to conform with any of the Product
Warranties is as set forth in this Section 5.4, and in furtherance thereof, Client hereby waives all other remedies at law or
in equity regarding the foregoing claims.

6.                 
Damage or Destruction of Materials and/or Product

6.1             
Remedies. If during the manufacture of Product pursuant to this Agreement, Product and/or Materials are destroyed or damaged
by LWI Personnel, and such damage or destruction resulted from LWI’s failure to execute the Process in conformity with the
Master Production Record, then, except as provided in Section 6.2

below, LWI, as soon as it is commercially practicable
to do so, will provide CLIENT with additional Product production time equal to the actual time lost because of the destruction
or damage of the Product and/or Materials and will replace such Product and/or Materials at no additional cost to CLIENT. CLIENT
acknowledges and agrees that its sole remedy with respect to damaged or destroyed Materials and/or Product (except for the non-conformity
of shipped Product described in Section 5) is as set forth in this Section 6.1

, and in furtherance thereof, CLIENT hereby waives
all other remedies at law or in equity regarding the foregoing claims.

6.2             
Limitations. Notwithstanding anything to the contrary set forth in the preceding Section 6.1, if during the manufacture of
Product pursuant to this Agreement, Product or Materials are destroyed or damaged by LWI Personnel while LWI Personnel were acting
at the direction of CLIENT Personnel, then LWI will have no liability to CLIENT as the result of such destruction or damage.

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7.                 
Storage Of Materials

7.1             
Pre-Production. LWI will store at the expense of CLIENT any CLIENT Materials, equipment or other property delivered pursuant
to the Statement of Work or the Draft Plan to the Facility by CLIENT more than 30 days prior to the Commencement Date. The storage
rates will be set forth in the Statement of Work and may be amended from time to time by LWI. No storage fees will be charged
during the period starting 30 days prior to the Commencement Date and ending upon the expiration or termination of the Production
Term.

7.2             
Post-Production. LWI will store at the Facility free of charge any in–process materials, CLIENT Materials, equipment
and other CLIENT property (other than Product manufactured hereunder) that remains at the Facility on the date of expiration or
termination of the Production Term (collectively “Remaining CLIENT Property”), for up to 15 calendar days.
If CLIENT has not provided any instructions as to the shipment or other disposition of Remaining CLIENT Property prior to the
expiration of such fifteen (15)-day period, LWI may, in its sole discretion, destroy such Remaining CLIENT Property, or continue
to store such Remaining CLIENT Property at the Facility or elsewhere. In the event that LWI continues to store such Remaining
CLIENT Property, CLIENT will pay to LWI a storage charge at LWI’s then-standard storage rates for the period beginning on
the sixteenth (16th) day after the expiration or termination of the Production Term through the date that the storage terminates.

7.3             
Product. Notwithstanding the foregoing, if CLIENT fails to take delivery of a Product within the applicable Delivery Period
as required by Section 4.5, CLIENT will pay to LWI a storage charge at three times LWI’s then standard storage rate, which
shall begin accruing on the first day following the expiration of the applicable Delivery Period.

8.                 
Regulatory Matters

8.1             
Permits and Approvals. During the Production Term, LWI will use commercially reasonable efforts to maintain any licenses,
permits and approvals necessary for the manufacture of the Product in the Facility. LWI will promptly notify CLIENT if LWI receives
notice that any such license, permit, or approval is or may be revoked or suspended.

8.2             
Inspections/Quality Audit by CLIENT. Up to two times during the Production Term and upon not less than 30 days’ prior
written notice, LWI will permit CLIENT to inspect and audit the parts of the Facility where the manufacture of the Product is
carried out in order to assess LWI’s compliance with cGMP, and to discuss any related issues with LWI’s management
personnel. CLIENT Personnel engaged in such inspection will abide by the terms and conditions set forth in Sections 4.8.4

and 10.

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8.3             
Inspections by Regulatory Agencies. LWI will allow representatives of any regulatory agency to inspect the relevant parts
of the Facility where the manufacture of the Product is carried out and to inspect the Master Production Record and Batch Records
to verify compliance with cGMP and other practices or regulations and will promptly notify CLIENT of the scheduling of any such
inspection relating to the manufacture of Product. LWI will promptly send to CLIENT a copy of any reports, citations, or warning
letters received by CLIENT in connection with an inspection of a regulatory agency to the extent such documents relate to or affect
the manufacture of the Product.

9.                 
Financial Terms

9.1             
Payments. CLIENT will make payments to LWI in the amounts and on the dates set forth in the Statement of Work. In the event
that CLIENT has not paid an invoice within thirty (30) business days of the applicable due date (as established by Section 9.3),
CLIENT’s failure shall be considered a material breach under Section 14.2, subject to the cure provisions set forth therein.
Further, in addition to all other remedies available to LWI, in the event that CLIENT has not paid an invoice within sixty (60)
business days of the applicable due date (as established by Section 9.3), LWI may elect to suspend the provision of all or a portion
of the services under this Agreement, provided that CLIENT shall remain liable for all fees owed pursuant to the Statement of
Work during any such suspension. 

9.2             
Security Deposit. The Security Deposit, as defined in the Statement of Work, will be returned to CLIENT within 60 days after
the date of expiration or termination of this Agreement, if CLIENT has paid all fees, charges, or other payments due in connection
with charges incurred prior to the expiration or termination of this Agreement, including, but not limited to, charges for lost,
destroyed, stolen or damaged property of LWI (all such fees, charges, or other payments being called “Obligations”).
If any Obligations remain outstanding after the date of expiration or termination of this Agreement, then LWI shall be entitled
to apply the Security Deposit against the payment of such Obligations. The amount of the Security Deposit remaining, if any, after
such application will be returned to CLIENT. CLIENT shall remain liable to LWI for any deficiencies remaining after the application
of the Security Deposit against the Obligations.

9.3             
Invoices. Within 30 days of the end of each month during which charges were incurred, LWI will provide CLIENT with an invoice
setting forth a detailed account of any fees, expenses, or other payments payable by CLIENT under this Agreement for the preceding
month. The amounts set forth in each such invoice will be due and payable within 30 days of receipt of such invoice by CLIENT.

9.4             
Taxes. CLIENT agrees that it is responsible for and will pay any sales, use or other taxes (the “Taxes”)
resulting from LWI’s production of Product under this Agreement (except for income or personal property taxes payable by
LWI). To the extent not paid by CLIENT, CLIENT will indemnify and hold harmless the LWI Parties from and against any and all penalties,
fees, expenses and costs whatsoever in connection with the failure by CLIENT to pay the Taxes. LWI will not collect any sales
and use taxes from CLIENT in connection with the production of any Product hereunder if CLIENT provides to LWI the appropriate
valid exemption certificates.

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9.5             
Interest. Any fee, charge or other payment due to LWI by CLIENT under this Agreement that is not paid within 30 days after
it is due will accrue interest on a daily basis at a rate of 1.5% per month (or the maximum legal interest rate allowed by applicable
law, if less) from and after such date.

9.6             
Method of Payment. All payments to LWI hereunder by CLIENT will be in United States currency and will be by check, wire transfer,
money order, or other method of payment approved by LWI. Bank information for wire transfers is as follows:

Mailing
address for wire transfer payments:

[TO
BE PROVIDED]

9.7             
Cost Adjustments. After the first anniversary of the Effective Date, LWI may annually adjust the various costs and rates set
forth in the Statement of Work attached hereto to reflect changes in the cost of materials and/or labor rate paid by LWI in connection
with the production of Product under this Agreement; provided, however, that any increase in labor rates shall not exceed any
percentage increase in the US Consumer Price Index for the most recently published percentage change for the 12-month period preceding
the applicable contract anniversary date. LWI agrees to provide CLIENT with written notice of any such cost adjustment.

10.             
Confidential Information 

10.1         
Definition. “Confidential Information” means all technical, scientific and other know-how and information,
trade secrets, knowledge, technology, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures,
specifications, data, results and other material, pre-clinical and clinical trial results, manufacturing procedures, test procedures
and purification and isolation techniques, and any tangible embodiments of any of the foregoing, and any scientific, manufacturing,
marketing and business plans, any financial and personnel matters relating to a Party or its present or future products, sales,
suppliers, customers, employees, investors or business, that has been disclosed by or on behalf of such Party to the other Party
either in connection with the discussions and negotiations pertaining to this Agreement or in the course of performing this Agreement.
Without limiting the foregoing, the terms of this Agreement will be deemed “Confidential Information” and will be
subject to the terms and conditions set forth in this Article 10

.

10.2         
Exclusions. Notwithstanding the foregoing Section 10.1

, any information disclosed by a Party to the other
Party will not be deemed “Confidential Information” to the extent that such information:

(a)    
at the time of disclosure is in the public domain;

(b)    
becomes part of the public domain, by publication or otherwise, through no fault of the Party receiving such information;

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(c)    
at the time of disclosure is already in possession of the Party who received such information, as established by contemporaneous
written records; 

(d)    
is lawfully provided to a Party, without restriction as to confidentiality or use, by a Third Party lawfully entitled to possession
of such Confidential Information; or

(e)    
is independently developed by a Party without use of or reference to the other Party’s Confidential Information, as
established by contemporaneous written records. 

10.3         
Disclosure and Use Restriction. Except as expressly provided herein, the Parties agree that for the term of the Agreement
and the five-year period following any termination of the Agreement, each Party and its Affiliates will keep completely confidential
and will not publish or otherwise disclose any Confidential Information of the other Party, its Affiliates or sublicensees, except
in accordance with Section 10.4. Neither Party will use Confidential Information of the other Party except as necessary to perform
its obligations or to exercise its rights under this Agreement.

10.4         
Permitted Disclosures. Each receiving Party agrees to (i) institute and maintain security procedures to identify and account
for all copies of Confidential Information of the disclosing Party and (ii) limit disclosure of the disclosing Party’s Confidential
Information to its U.S. and European Affiliates and each of its and their respective officers, directors, employees, agents, consultants
and independent contractors having a need to know such Confidential Information for purposes of this Agreement; provided that
such U.S. and European Affiliates and each of its and their respective officers, directors, employees, agents, consultants and
independent contractors are informed of the terms of this Agreement and are subject to obligations of confidentiality, non-disclosure
and non-use similar to those set forth herein. 

10.5         
Government-Required Disclosure. If a duly constituted government authority, court or regulatory agency orders that a Party
hereto disclose information subject to an obligation of confidentiality under this Agreement, such Party shall comply with the
order, but shall notify the other Party as soon as possible, so as to provide the said Party an opportunity to apply to a court
of record for relief from the order. 

10.6         
Publicity. Neither Party will refer to, display or use the other’s name, trademarks or trade names confusingly similar
thereto, alone or in conjunction with any other words or names, in any manner or connection whatsoever, including any publication,
article, or any form of advertising or publicity, except with the prior written consent of the other Party.

11.             
Intellectual Property

11.1         
Ownership. 

11.1.1   
As between the Parties, CLIENT shall own any and all inventions or discoveries that are (i) made, conceived or reduced to
practice in the course of or resulting from this Agreement by either Party alone or the Parties jointly and (ii) applicable specifically
only to the Product or the Process (“CLIENT New IP”). LWI hereby assigns to CLIENT all of LWI’s right,
title and interest in and to such CLIENT New IP. 

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11.1.2   
As between the Parties, LWI shall own any and all inventions or discoveries that are (i) made, conceived or reduced to practice
in the course of or resulting from this Agreement by LWI and (ii) capable of being applied to products or processes other than
or in addition to the Product or the Process, and (iii) relates generally to LWI’s business of producing biological materials
(“LWI New IP”). CLIENT hereby assigns to LWI all of CLIENT’s right, title and interest in and to such
LWI New IP. 

11.2         
License Grants. 

11.2.1   
During the term of this Agreement, CLIENT hereby grants to LWI a fully paid, non-exclusive license under any and all CLIENT
Intellectual Property that is necessary for LWI to perform its obligations under this Agreement for the sole and limited purpose
of LWI’s performance of its obligations under this Agreement, including, without limitation, the development of the Process
and the manufacture of Product for CLIENT.

11.2.2   
LWI hereby grants to CLIENT an irrevocable, fully paid, non-exclusive license, with the right to grant and authorize sublicenses,
under any and all (i) LWI Intellectual Property (including LWI New IP) that LWI incorporates into the Process, to make, have made,
use, sell, offer for sale, have sold and import the Product, and (ii) know-how included in the LWI New IP and not claimed in a
patent or patent application, to use for any purpose.

11.3         
Further Assurances. Each Party agrees to take all necessary and proper acts, and will cause its employees, Affiliates, contractors,
and consultants to take such necessary and proper acts, to effectuate the ownership provisions set forth in this Article 11.

11.4         
Prosecution of Patents. 

11.4.1   
LWI will have the sole right and discretion to file, prosecute and maintain patent applications and patents claiming LWI Inventions
at LWI’s expense. CLIENT will cooperate with LWI to file, prosecute and maintain patent applications and patents claiming
LWI Inventions, and will have the right to review and provide comments to LWI relating to such patent applications and patents.

11.4.2   
CLIENT will have the sole right and discretion to file, prosecute and maintain patent applications and patents claiming CLIENT
Inventions at CLIENT’s expense. LWI will cooperate with CLIENT to file, prosecute and maintain patent applications and patents
claiming CLIENT Inventions, and will have the right to review and provide comments to CLIENT relating to such patent applications
and patents.

12.             
Representations and Warranties 

12.1         
By CLIENT. CLIENT hereby represents and warrants to LWI that, to the best of its knowledge, (i) it has the requisite intellectual
property and legal rights related to the CLIENT Deliverables and the Product to authorize the performance of LWI’s obligations
under this Agreement, and (ii) the performance of the Statement of Work and the production by LWI of the Product as contemplated
in this Agreement will not give rise to a potential cause of action by a Third Party against LWI for infringement or another violation
of intellectual property rights. Such representation and warranty will not apply to any production equipment supplied by LWI.

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12.2         
By LWI. LWI hereby represents and warrants to CLIENT that, to the best of its knowledge, (i) it has the requisite intellectual
property rights in its equipment and Facility to be able to perform its obligations under this Agreement, and (ii) that LWI’s
use of its equipment and Facility as contemplated in this Agreement will not give rise to a potential cause of action by a Third
Party against CLIENT for infringement or another violation of intellectual property rights. 

13.             
Disclaimer; Limitation of Liability

13.1         
DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, LWI MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES,
EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, WITH RESPECT TO THE PRODUCTS, MATERIALS, AND
SERVICES PROVIDED UNDER THIS AGREEMENT, AND LWI SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS
OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE WITH RESPECT TO SUCH
PRODUCTS, MATERIALS, OR SERVICES.

13.2         
Disclaimer of Consequential Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OF ITS AFFILIATES FOR ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, BUSINESS
OR GOODWILL) SUFFERED OR INCURRED BY SUCH OTHER PARTY OR ITS AFFILIATES IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.

13.3         
Limitation of Liability. BOTH PARTIES HEREBY AGREE THAT TO THE FULLEST EXTENT PERMITTED BY LAW, LWI’S LIABILITY TO CLIENT,
FOR ANY AND ALL INJURIES, CLAIMS, LOSSES, EXPENSES, OR DAMAGES, WHATSOEVER, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT
FROM ANY CAUSE OR CAUSES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, ERRORS, OMISSIONS OR STRICT LIABILITY, SHALL NOT EXCEED THE
TOTAL CHARGES PAID BY CLIENT TO LWI DURING THE 12 (TWELVE) MONTHS PRECEDING THE EVENT GIVING RISE TO LIABILITY. TO THE EXTENT
THAT THIS CLAUSE CONFLICTS WITH ANY OTHER CLAUSE, THIS CLAUSE SHALL TAKE PRECEDENCE OVER SUCH CONFLICTING CLAUSE. IF APPLICABLE
LAW PREVENTS ENFORCEMENT OF THIS CLAUSE, THEN THIS CLAUSE SHALL BE DEEMED MODIFIED TO PROVIDE THE MAXIMUM PROTECTION FOR LWI AS
IS ALLOWABLE UNDER APPLICABLE LAW.

14.             
Term and Termination

14.1         
Term. The term of this Agreement will commence on the Effective Date and will continue until the fifth anniversary of the
Effective Date unless terminated prior to that time or extended by the Parties. 

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14.2         
Termination for Material Breach. Either Party may terminate this Agreement, by written notice to the other Party, for any
material breach of this Agreement by the other Party, if such breach is not cured within thirty (30) days after the breaching
Party receives written notice of such breach from the non-breaching Party; provided, however, that if such breach is not capable
of being cured within such thirty-day period and the breaching Party has commenced and diligently continued actions to cure such
breach within such thirty-day period, except in the case of a payment default, the cure period shall be extended to 180 days,
so long as the breaching Party is making diligent efforts to do so. Such termination shall be effective upon expiration of such
cure period. 

14.3         
Termination by Notice. 

14.3.1
Without Cause. After the first anniversary of the Effective Date, either Party may terminate this Agreement by providing written
notice of termination not less than six months in advance of the date of termination. For the avoidance of doubt, in the event
of termination by CLIENT under this Section 14.3.1, CLIENT shall, at minimum, remain liable for all fees owed pursuant to any
outstanding Statement of Work during such six-month period.

14.3.2
Termination of Clinical Trials. Either Party may terminate this Agreement if such Party receives notice that the production
of Product hereunder or the clinical trials for which Product is being produced hereunder have been or will be suspended or terminated
by the FDA (or other regulatory authority) by providing written notice of termination not less than 2 months in advance of the
date of termination. For the avoidance of doubt, in the event of termination by CLIENT under this Section 14.3.2, CLIENT shall,
at minimum, remain liable for all fees owed pursuant to any outstanding Statement of Work during such two-month period.

14.4         
Termination by Insolvency. Either Party may terminate this Agreement upon notice to the other Party, upon (a) the dissolution,
termination of existence, liquidation or business failure of the other Party; (b) the appointment of a custodian or receiver for
the other Party who has not been terminated or dismissed within ninety (90) days of such appointment; (c) the institution by the
other Party of any proceeding under national, federal or state bankruptcy, reorganization, receivership or other similar laws
affecting the rights of creditors generally or the making by such Party of a composition or any assignment for the benefit of
creditors under any national, federal or state bankruptcy, reorganization, receivership or other similar law affecting the rights
of creditors generally, which proceeding is not dismissed within ninety (90) days of filing. All rights and licenses granted pursuant
to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States
Code, licenses of rights of “intellectual property” as defined therein.

14.5         
Effects of Termination.

14.5.1   
Accrued Rights. Termination of this Agreement for any reason will be without prejudice to any rights that will have accrued
to the benefit of a Party prior to such termination. Such termination will not relieve a Party of obligations that are expressly
indicated to survive the termination of this Agreement.

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14.5.2   
Disposition of Remaining CLIENT Property and Confidential Information. Upon termination or expiration of this Agreement, LWI
will store any Remaining CLIENT Property as set forth in Section 7.2

and, at CLIENT’s option, return or destroy any
CLIENT Confidential Information in the possession or control of LWI. Likewise, CLIENT will, at LWI’s option, return or destroy
any LWI Confidential Information in the possession or control of CLIENT. Notwithstanding the foregoing provisions: (i) LWI may
retain and preserve, at its sole cost and expense, samples and standards of each Product following termination or expiration of
this Agreement solely for use in determining LWI’s rights and obligations hereunder; and (ii) each Party may retain a single
copy of the other Party’s Confidential Information for documentation purposes only and which shall remain subject to the
obligations of nonuse and confidentiality set forth in this Agreement.

 

14.5.3   
Security Deposits. Upon any termination of this Agreement by LWI pursuant to Section 14.2, LWI will have the right to retain
the full amount of any Security Deposit paid to LWI pursuant to a Statement of Work, without limiting any of its rights in law
or in equity under this Agreement.

14.5.4   
Survival. Sections 1, 3.4, 4.9, 7.2, 10, 11, 13, 14.4, 15, 16 and 17 of this Agreement, together with any appendices referenced
therein, will survive any expiration or termination of this Agreement. 

15.             
Indemnification

15.1         
Indemnification of Client. LWI will indemnify CLIENT, its Affiliates, and their respective directors, officers, employees
and agents, and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses
(including reasonable attorneys’ fees and expenses) in connection with any and all liability suits, investigations, claims
or demands (collectively, “Losses”) to the extent such Losses arise out of or result from any claim, lawsuit
or other action or threat by a Third Party arising out of: (a) any material breach by LWI of this Agreement, or (b) the gross
negligence or willful misconduct on the part of one or more of the LWI Parties in performing any activity contemplated by this
Agreement, except for those Losses for which CLIENT has an obligation to indemnify the LWI Parties pursuant to Section 15.2, as
to which Losses each Party will indemnify the other to the extent of their respective liability for the Losses.

15.2         
Indemnification of LWI. CLIENT will indemnify LWI and its Affiliates, and their respective directors, officers, employees
and agents (the “LWI Parties”), and defend and hold each of them harmless, from and against any and all Losses
to the extent such Losses arise out of or result from any claim, lawsuit or other action or threat by a Third Party arising out
of: (a) any material breach by CLIENT of this Agreement, (b) the use or sale of Products, except to the extent such Losses arise
out of or result from a breach by LWI of the Product Warranties, (c) the gross negligence or willful misconduct on the part of
CLIENT or its Affiliates in performing any activity contemplated by this Agreement, or (d) the use or practice by LWI of any process,
invention or other intellectual property supplied by CLIENT to LWI under this Agreement, except for those Losses for which LWI
has an obligation to indemnify CLIENT pursuant to Section 15.1, as to which Losses each Party will indemnify the other to the
extent of their respective liability for the Losses.

    	170

    	 

    

 

15.3         
Indemnification Procedure.

15.3.1   
An “Indemnitor” means the indemnifying Party. An “Indemnitee” means the indemnified
Party, its Affiliates, and their respective directors, officers, employees and agents. 

15.3.2   
An Indemnitee which intends to claim indemnification under Section 15.1 or Section 15.2 hereof shall promptly notify
the Indemnitor in writing of any claim, lawsuit or other action in respect of which the Indemnitee, its Affiliates, or any of
their respective directors, officers, employees and agents intend to claim such indemnification. The Indemnitee shall permit,
and shall cause its Affiliates and their respective directors, officers, employees and agents to permit, the Indemnitor, at its
discretion, to settle any such claim, lawsuit or other action and agrees to the complete control of such defense or settlement
by the Indemnitor; provided, however, that in order for the Indemnitor to exercise such rights, such settlement shall not adversely
affect the Indemnitee’s rights under this Agreement or impose any obligations on the Indemnitee in addition to those set
forth herein. No such claim, lawsuit or other action shall be settled without the prior written consent of the Indemnitor and
the Indemnitor shall not be responsible for any legal fees or other costs incurred other than as provided herein. The Indemnitee,
its Affiliates and their respective directors, officers, employees and agents shall cooperate fully with the Indemnitor and its
legal representatives in the investigation and defense of any claim, lawsuit or other action covered by this indemnification,
all at the reasonable expense of the Indemnitor. The Indemnitee shall have the right, but not the obligation, to be represented
by counsel of its own selection and expense. 

15.4         
Insurance. CLIENT will maintain, at all times during the term of this Agreement and for five years thereafter, a products
liability insurance policy (the “Insurance Policy”), with a per occurrence limit of at least five million dollars
($5,000,000) and an aggregate limit of at least five million dollars ($5,000,000), and will provide a Certificate of Insurance
to LWI that the Insurance Policy has been endorsed to designate LWI as an additional insured. CLIENT will maintain the Insurance
Policy with an insurance company having a minimum AM Best rating of A and that is licensed to do business in the State of Maryland.
CLIENT will provide LWI with at least 30 days’ written notice prior to termination of such Insurance Policy.

16.             
Additional Covenants

16.1         
Non-Solicitation. During the term of this Agreement and for two (2) years thereafter, each of the Parties agrees not to seek
to induce or solicit any employee of the other Party or its Affiliates to discontinue his or her employment with the other Party
or its Affiliate in order to become an employee or an independent contractor of the soliciting Party or its Affiliate; provided,
however, that neither Party shall be in violation of this Section 16.1 as a result of making a general solicitation for employees
or independent contractors. For the avoidance of doubt, the publication of an advertisement shall not constitute solicitation
or inducement.

16.2         
Commercial Scale Manufacture. In the event that CLIENT desires to commence commercial scale manufacture of Product, the Parties
agree to negotiate for the provision of such manufacturing services to CLIENT by LWI. 

    	171

    	 

    

 

17.             
Miscellaneous

17.1         
Independent Contractors. Each of the Parties is an independent contractor and nothing herein contained shall be deemed to
constitute the relationship of partners, joint venturers, nor of principal and agent between the Parties. Neither Party shall
at any time enter into, incur, or hold itself out to Third Parties as having authority to enter into or incur, on behalf of the
other Party, any commitment, expense, or liability whatsoever.

17.2         
Force Majeure. Neither Party shall be in breach of this Agreement if there is any failure of performance under this Agreement
(except for payment of any amounts due under this Agreement) occasioned by any reason beyond the control and without the fault
or negligence of the Party affected thereby, including, without limitation, an act of God, fire, flood, act of government or state,
war, civil commotion, insurrection, acts of terrorism, embargo, sabotage, a viral, bacterial or mycoplasmal contamination which
causes a shutdown of the Facility, prevention from or hindrance in obtaining energy or other utilities, a shortage of raw materials
or other necessary components, labor disputes of whatever nature, or any other reason beyond the control and without the fault
or negligence of the Party affected thereby (a “Force Majeure Event”). Such excuse shall continue as long as
the Force Majeure Event continues. Upon cessation of such Force Majeure Event, the affected Party shall promptly resume performance
under this Agreement as soon as it is commercially reasonable for the Party to do so. 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 to fully perform its obligations under this Agreement. Each Party further agrees to use commercially reasonable
efforts to correct the Force Majeure Event as quickly as practicable (provided that in no event shall a Party be required to settle
any labor dispute) and to give the other Party prompt written notice when it is again fully able to perform such obligations.

17.3         
Condemnation. If the Facility is condemned or taken as a result of the exercise of the power of eminent domain or will be
conveyed to a governmental agency having power of eminent domain under the threat of the exercise of such power (any of the foregoing,
a “Condemnation”), then this Agreement will terminate as of the date on which title to the Facility vests in
the authority so exercising or threatening to exercise such power and CLIENT will not have any right to the Condemnation proceeds.

17.4         
Notices. Any notice required or permitted to be given under this Agreement by any Party shall be in writing and shall be (a) delivered
personally, (b) sent by registered mail, return receipt requested, postage prepaid, (c) sent by a nationally-recognized
courier service guaranteeing next-day or second day delivery, charges prepaid, or (d) delivered by facsimile (with documented
evidence of transmission), to the addresses or facsimile numbers of the other Party set forth below, or at such other addresses
as may from time to time be furnished by similar notice by any Party. The effective date of any notice under this Agreement shall
be the date of receipt by the receiving Party.

    	172

    	 

    

 

If
to LWI:

Lonza
Walkersville, Inc.

Attn:
Vice President, Cell Therapy Bioservice

8830
Biggs Ford Road

Walkersville,
Maryland 21793

Fax:
(301) 845-6099

 

With
a copy to:

Assistant
General Counsel

Lonza
America, Inc.

90
Boroline Road

Allendale,
NJ 07401

Fax:
(201) 696-3589

 

If
to Client:

<insert
full legal name of client company>

Attn:
<insert appropriate name>

<insert
street address>

<insert
city, state and zip code>

Fax:
<insert fax number>

 

Either
Party may change its address for notice by giving notice thereof in the manner set forth in this Section 17.4.

17.5         
Entire Agreement; Amendments. This Agreement, including the Appendices attached hereto and referenced herein, constitutes
the full understanding of the Parties and a complete and exclusive statement of the terms of their agreement with respect to the
specific subject matter hereof and supersedes all prior agreements and understandings, oral and written, among the Parties with
respect to the subject matter hereof. No terms, conditions, understandings or agreements purporting to amend, modify or vary the
terms of this Agreement (including any Appendix hereto) shall be binding unless hereafter made in a written instrument referencing
this Agreement and signed by each of the Parties.

17.6         
Governing Law. This Agreement will be governed by and construed in accordance with the internal laws of the State of Delaware,
without giving effect to its conflicts of laws provisions.

17.7         
Counterparts. This Agreement and any amendment hereto may be executed in any number of counterparts, each of which shall for
all purposes be deemed an original and all of which shall constitute the same instrument. This Agreement shall be effective upon
full execution by facsimile or original, and a facsimile signature shall be deemed to be and shall be as effective as an original
signature.

17.8         
Severability. If any part of this Agreement shall be found to be invalid or unenforceable under applicable law in any jurisdiction,
such part shall be ineffective only to the extent of such invalidity or unenforceability in such jurisdiction, without in any
way affecting the remaining parts of this Agreement in that jurisdiction or the validity or enforceability of the Agreement as
a whole in any other jurisdiction. In addition, the part that is ineffective shall be reformed in a mutually agreeable manner
so as to as nearly approximate the intent of the Parties as possible.

    	173

    	 

    

 

17.9         
Titles and Subtitles. All headings, titles and subtitles used in this Agreement (including any Appendix hereto) are for convenience
only and are not to be considered in construing or interpreting any term or provision of this Agreement (or any Appendix hereto).

17.10     
Exhibits. All “RECITALS”, “DEFINITIONS”, exhibits and appendices referred to herein form an integral
part of this Agreement and are incorporated into this Agreement by such reference.

17.11     
Pronouns. Where the context requires, (i) all pronouns used herein will be deemed to refer to the masculine, feminine or neuter
gender as the context requires, and (ii) the singular context will include the plural and vice versa.

17.12     
Assignment. This Agreement shall be binding upon the successors and assigns of the Parties and the name of a Party appearing
herein shall be deemed to include the names of its successors and assigns. Neither Party may assign its interest under this Agreement
without the prior written consent of the other Party, such consent not to be unreasonably withheld. Any permitted assignment of
this Agreement by either Party will be conditioned upon that Party’s permitted assignee agreeing in writing to comply with
all the terms and conditions contained in this Agreement. Any purported assignment without a required consent shall be void. No
assignment shall relieve any Party of responsibility for the performance of any obligation that accrued prior to the effective
date of such assignment. 

17.13     
Waiver. The failure of any Party at any time or times to require performance of any provision of this Agreement (including
any Appendix hereto) will in no manner affect its rights at a later time to enforce the same. No waiver by any Party of any term,
provision or condition contained in this Agreement (including any Appendix hereto), whether by conduct or otherwise, in any one
or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition
or of any other term, provision or condition of this Agreement (including any Appendix hereto).

17.14     
Dispute Resolution. If the Parties are unable to resolve a dispute, despite its good faith efforts, either Party may refer
the dispute to the Chief Executive Officer (or other designee) of each Party. In the event that no agreement is reached by the
Chief Executive Officers (or other designees) with respect to such dispute within thirty (30) days after its referral to them,
either Party may pursue any and all remedies available at law or in equity. 

17.15     
No Presumption Against Drafter. For purposes of this Agreement, CLIENT hereby waives any rule of construction that requires
that ambiguities in this Agreement (including any Appendix hereto) be construed against the drafter.

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    	174

    	 

    

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date last signed by the parties hereto.

 

		[INSERT
    NAME OF CLIENT]
	Date	By:
		Name:
		Title:
		
		LONZA
    WALKERSVILLE, INC.
	Date	By:
		Name:
		Title:

    	175

    	 

    

APPENDIX
A

STATEMENT
OF WORK

 

TO
BE ATTACHED

    	176

    	 

    

APPENDIX
B

QUALITY
AGREEMENT

 

TO
BE ATTACHED

 

    	177

    	 

    

Exhibit
J – Stock Purchase Agreement

STOCK
PURCHASE AGREEMENT

Dated
as of [__________]

Between

Regenicin
, Inc.

[“PURCHASER”]

And

Lonza
Walkersville, Inc.

[“COMPANY”]

with
respect to all outstanding capital stock of the

Cutanogen
Corporation

(“Cutanogen”)

    	178

    	 

    

STOCK
PURCHASE AGREEMENT

 

This
STOCK PURCHASE AGREEMENT, dated as of [___________] (this "Agreement"), is between Regenicin, Inc., a Nevada
corporation ("Purchaser"), and Lonza Walkersville, Inc., a Delaware corporation (the "Company").
Certain terms used in this Agreement without definition shall have their meanings as defined in Section 8.11.

W
I T N E S S E T H :

WHEREAS,
the Company owns all of the issued and outstanding capital stock of Cutanogen (referred to herein as the "Cutanogen Shares");

WHEREAS,
Cutanogen is engaged in the research and development of products used in the life sciences industry (“Cutanogen Business”);

WHEREAS,
the parties have entered into a Know-How License and Stock Purchase Agreement, dated June 30, 2009 (the “License and SPA”);

WHEREAS,
upon the occurrence of certain events delineated in the License and SPA, the Company desires to sell, and Purchaser desires to
purchase, the Cutanogen Shares on the terms and subject to the conditions set forth in this Agreement;

NOW,
THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and intending
to be legally bound hereby, Purchaser and the Company hereby agree as follows:

ARTICLE
I

SALE OF SHARES AND CLOSING

Section
1.1                      
Purchase and Sale

.
The Company agrees to sell to Purchaser, and Purchaser agrees to purchase from the Company, all of the right, title and interest
of the Company in and to the Cutanogen Shares at the Closing on the terms and subject to the conditions set forth in this Agreement.

 (b)Company
acknowledges receipt of two million dollars ($2,000,000) from Purchaser as the aggregate purchase price for the Cutanogen Shares
in accordance with Paragraph 6.2 of the License and SPA, to which this Agreement is attached. The parties agree that (i) Company
will retain the exclusive right to manufacture the PermaDerm product line at a customary margin level as more definitively set
forth in the form of agreement (“Manufacturing Agreement”) attached hereto as Exhibit 1.2b and Purchaser will
be responsible for gaining regulatory approval of PermaDerm and all associated expenses including those which Company might incur
under the Manufacturing Agreement; and (ii) in addition, Company will retain the distribution rights for the collagen sponge,
which is the tissue engineered matrix of PermaDerm. Under such distribution agreement Company will keep 15% of the collagen sponge
sale price as a logistics/distribution fee. Additionally, any remaining profit from the sale of the sponge to a third party will
be split equally between the parties. The distribution agreement will contain a list of those entities which will not be included
as part of its distribution rights. Notwithstanding the above, in order to effectuate these rights to be retained by Company,
Purchaser will provide Company with a worldwide, transferable, non-revocable license enabling Company to perform such tasks.

    	179

    	 

    

 

Section
1.2                      
Closing

.
The closing of the purchase and sale of the Cutanogen Shares pursuant to this Agreement (the "Closing") shall
take place at 10:00 a.m. (New York time) on a date to be specified by the parties (the "Closing Date"), which
date shall be no later than the second (2nd) business day after the achievement of certain milestones included in the
License and SPA and satisfaction or waiver of the conditions set forth in Article V (other than those conditions that
by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time),
at the offices of Lonza Inc., 90 Boroline Road, Allendale, NJ 07401, unless another time, date or place is agreed to in writing
by the parties hereto. At the Closing, the Company will assign and transfer to Purchaser all of Company's right, title and interest
in and to the Cutanogen Shares by delivering to Purchaser certificates representing the Cutanogen Shares, in genuine and unaltered
form, duly endorsed in blank or accompanied by duly executed stock powers endorsed in blank, with requisite stock transfer tax
stamps, if any, attached. At the Closing, there shall also be delivered to the Company and Purchaser the certificates and other
instruments to be delivered under Article V.

Section
1.3                      
Further Assurances; Post-Closing Cooperation

.

(a)                
Subject to the terms and conditions of this Agreement, at any time or from time to time after the Closing, each of the parties
hereto shall execute and deliver such other documents and instruments, provide such materials and information and take such other
actions as may reasonably be necessary, proper or advisable, to the extent permitted by Law, to fulfill its obligations under
this Agreement.

(b)                
Following the Closing, each party will afford the other party, its counsel and its accountants, during normal business hours,
reasonable access to the books, records, personnel files, payroll files and other data relating to the Cutanogen Business in its
possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that
such access may be reasonably required by the requesting party in connection with (i) the preparation of Tax Returns, (ii) the
determination or enforcement of rights and obligations under this Agreement, (iii) compliance with the requirements of any
Governmental Authority, (iv) in connection with any actual or threatened Action or Proceeding or (v) the determination
of pension or other benefits. Further, each party agrees for a period extending six (6) years after the Closing Date not to destroy
or otherwise dispose of any such books, records, personnel files, payroll files and other data unless such party shall first offer
in writing to surrender such books, records, personnel files, payroll files and other data to the other party and such other party
shall not agree in writing to take possession thereof during the sixty (60) day period after such offer is made. 

    	180

    	 

    

 

(c)                
If, in order properly to prepare its Tax Returns, other documents or reports required to be filed with Governmental Authorities
or its financial statements or to fulfill its obligations hereunder, it is necessary that a party be furnished with additional
information, documents or records relating to the Cutanogen Business not referred to in paragraph (b) above, and such information,
documents or records are in possession or control of the other party, such other party agrees to use its reasonable best efforts
to furnish or make available such information, documents or records (or copies thereof) at the recipient's request, cost and expense.

(d)                
Notwithstanding anything to the contrary contained in this Section, if the parties are in an adversarial relationship in litigation
or arbitration, the furnishing of information, documents or records in accordance with any provision of this Section 1.4
shall be subject to applicable rules relating to discovery.

ARTICLE
II
 Representations and Warranties of the Company

The
Company represents and warrants to Purchaser that:

Section
2.1                      
Organization and Standing

.

(a)                
Company is a corporation or other organization validly existing and in good standing under the Laws of its jurisdiction of incorporation
or organization. Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the
nature of the business conducted by it or the character or location of the properties and assets owned or leased or held under
license by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to impair in any material respect the ability of
Company to perform its obligations hereunder or prevent or materially delay consummation of the Cutanogen Transaction. 

(b)                
Cutanogen is a corporation or other organization validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization. 

Section
2.2                      
Capitalization

.
 (a) (a) All the outstanding shares of capital stock of, or other equity interests in, Cutanogen
are duly authorized, have been validly issued, are fully paid, nonassessable and free of preemptive rights, and are owned directly
by Company free and clear of all liens, pledges, security interests and transfer restrictions, except for such transfer restrictions
of general applicability as may be provided under applicable securities Laws and rules and regulations promulgated thereunder
("Liens"). The delivery of certificates at the Closing representing the Cutanogen Shares in the manner provided
in Section 1.3 will transfer to Purchaser good and valid title to the Cutanogen Shares, free and clear of all Liens other
than Liens created or suffered to exist by Purchaser.

    	181

    	 

    

 

(b)                
There are no outstanding contractual obligations of the Company or any of its Subsidiaries (i) restricting the transfer of,
(ii) affecting the voting rights of, (iii) requiring the sale, issuance or other disposition of, or the repurchase,
redemption or disposition of, or containing any right of first refusal with respect to, (iv) requiring the registration for
sale of, or (v) granting any preemptive or anti-dilutive right with respect to, any shares of capital stock of, or other
equity interests in, Cutanogen.

Section
2.3                      
Authority; Noncontravention; Voting Requirements

.

(a)                
The Company has all necessary corporate power and authority to execute and deliver this Agreement and, subject to obtaining the
Company Stockholder Authorization, to perform its obligations hereunder and to consummate the Cutanogen Transaction. The execution,
delivery and performance by the Company of this Agreement, has been duly authorized and approved by the board of directors of
Company, and except for obtaining the Company Stockholder Authorization, no other corporate action on the part of any of Company
is necessary to authorize the execution, delivery and performance by the Company of this Agreement. This Agreement has been duly
executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by Purchaser, constitutes
a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that
such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other
similar Laws of general application affecting or relating to the enforcement of creditors' rights generally and (ii) is subject
to general principles of equity, whether considered in a proceeding at Law or in equity (the "Bankruptcy and Equity Exception").

(b)                
The Company Board, at a meeting duly called and held, has or will have (i) approved and declared advisable this Agreement
and directed that this Agreement be submitted to the holders of shares of Company Common Stock for their authorization.

(c)                
The execution and delivery of this Agreement by the Company , will not (i) conflict with or violate any provision of the
certificate of incorporation or bylaws (or other comparable organization documents) or (ii) assuming that the authorizations,
consents and approvals referred to in Section 2.4 and the Company Stockholder Authorization are obtained and the filings
referred to in Section 2.4 are made, (x) violate any Law, judgment, writ or injunction of any Governmental Authority
applicable to the Company or any of its Subsidiaries or (y) violate or constitute a default under any of the terms, conditions
or provisions of any loan or credit agreement, debenture, note, bond, mortgage, indenture, deed of trust, lease, contract or other
agreement (each, a "Contract") to which the Company or any of its Subsidiaries is a party, except, in the case
of clause (ii), for such violations or defaults as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or to impair in any material respect the ability of Company to perform its obligations hereunder.

    	182

    	 

    

 

Section
2.4                      
Governmental Approvals

.
Except for (i) a possible filing with the Swiss Stock Exchange (“SWX”), (ii) filings required under, and
compliance with other applicable requirements of, the HSR Act and (iii) filings required under, and compliance with other
applicable requirements of, non-U.S. Laws intended to prohibit, restrict or regulate actions or transactions having the purpose
or effect of monopolization, restraint of trade, harm to competition or effectuating foreign investment (collectively, "Foreign
Antitrust Laws"), no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority
are necessary for the execution and delivery of this Agreement by the Company, other than such consents, approvals, filings, declarations
or registrations that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or to impair in any material respect the ability of the Company to perform its obligations hereunder.

Section
2.5                      
Intellectual Property

.

(a)                
As used herein: (i) "Intellectual Property" means all U.S. and foreign (A) trademarks, service marks, trade
names, Internet domain names, designs, logos and slogans, together with goodwill, registrations and applications relating to the
foregoing ("Trademarks"), (B) patents and pending patent applications, invention disclosure statements,
and any and all divisions, continuations, continuations-in-part, reissues, reexaminations and extensions thereof, any counterparts
claiming priority therefrom and like statutory rights ("Patents"), (C) registered and unregistered copyrights
(including those in Software) and registrations and applications to register the same ("Copyrights"), (D) confidential
technology, know-how, inventions, processes, formulae, algorithms, models and methodologies ("Trade Secrets")
and (E) databases and compilations, including any and all electronic data and electronic collections of data; (ii) "IP
Licenses" means any license or sublicense rights in or to any Intellectual Property; and (iii) "Software"
means all computer programs, including any and all software implementations of algorithms, models and methodologies whether
in source code or object code form, and all documentation, including user manuals and training materials, related to any of the
foregoing. A list of any Intellectual Property is attached hereto as Exhibit 2.5a.

(b)                
Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, Cutanogen
owns or possesses appropriate licenses or other legal rights to use, sell or license all Cutanogen Intellectual Property.

(c)                
Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all Trademark
registrations and applications for registration, Patents issued or pending and Copyright registrations and applications for registration
included in the Cutanogen Intellectual Property are valid and subsisting, in full force and effect and have not lapsed, expired
or been abandoned (subject to the vulnerability of a registration for Trademarks to cancellation for lack of use), and, to the
Knowledge of the Company, are not the subject of any opposition filed with the United States Patent and Trademark Office or any
other Intellectual Property registry.

    	183

    	 

    

 

(d)to
the Knowledge of the Company, the conduct of the Cutanogen Business does not infringe, misappropriate, or otherwise violate any
Intellectual Property rights of any third party.

(e)to
the Knowledge of the Company, no third party is infringing, misappropriating, diluting or violating any Cutanogen Intellectual
Property.

Section
2.6                      
Brokers and Other Advisors

.
No broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission, or the reimbursement of expenses, in connection with the transaction contemplated herein.

Section
2.7                      
No Other Representations or Warranties

.
Except for the representations and warranties made by the Company in this Article II or pursuant to the certificates
to be delivered pursuant to Section 5.2(a), neither the Company nor any other Person makes any representation or warranty
with respect to Cutanogen or, notwithstanding the delivery or disclosure to Purchaser or any of its Affiliates or representatives
of any documentation, forecasts or other information with respect to any one or more of the foregoing.

ARTICLE
III

Representations and Warranties of PURCHASER

Purchaser
represents and warrants to the Company that:

Section
3.1                      
Organization and Standing

.
Purchaser is a corporation validly existing and in good standing under the Laws of the State of Nevada. Purchaser is duly
licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets owned or leased or held under license by it makes such licensing
or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not, individually
or in the aggregate, reasonably be expected to impair in any material respect the ability of Purchaser to perform its obligations
hereunder or prevent or materially delay consummation of the Transaction.

Section
3.2                      
Authority; Noncontravention

(a)                
Purchaser has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the Transaction. The execution, delivery and performance by Purchaser of this Agreement, and the consummation
by Purchaser of the Transaction, have been duly authorized and approved by its board of directors, and no other corporate action
on the part of Purchaser is necessary to authorize the execution, delivery and performance by Purchaser of this Agreement and
the consummation by it of the Transaction. This Agreement has been duly executed and delivered by Purchaser and, assuming due
authorization, execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject to the Bankruptcy and Equity Exception.

    	184

    	 

    

 

(b)                
Neither the execution and delivery of this Agreement by Purchaser, nor the consummation by Purchaser of the Transaction, nor compliance
by Purchaser with any of the terms or provisions hereof, will (i) conflict with or violate any provision of the certificate
of incorporation or bylaws of Purchaser or (ii) assuming that the authorizations, consents and approvals referred to in Section 3.3
are obtained and the filings referred to in Section 3.3 are made, (x) violate any Law, judgment, writ or
injunction of any Governmental Authority applicable to Purchaser or any of its Subsidiaries, or (y) violate or constitute
a default under any of the terms, conditions or provisions of any Contract to which Purchaser or any of its Subsidiaries is a
party, except, in the case of clause (ii), for such violations or defaults as would not, individually or in the aggregate,
reasonably be expected to impair the ability of Purchaser to perform its obligations hereunder or prevent or materially delay
consummation of the Transaction.

(c)                
No vote of the holders of any class or series of Purchaser's capital stock or other securities is necessary for the consummation
by Purchaser of the Transaction.

Section
3.3                      
Governmental Approvals

.
No consents or approvals of, or filings, declarations or registrations with, any Governmental Authority are necessary for the
execution, delivery and performance of this Agreement by Purchaser, other than such other consents, approvals, filings, declarations
or registrations that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to
impair in any material respect the ability of Purchaser to perform its obligations hereunder or prevent or materially delay consummation
of the Transaction.

Section
3.4                      
Information Supplied

.
Any information supplied by Purchaser to Company will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein.

Section
3.5                      
Capital Resources

.
Purchaser has, or will have prior to the Closing, cash, available lines of credit or other sources of immediately available funds
in an amount sufficient to pay all fees and expenses payable by Purchaser. To the extent that Purchaser is financing all or a
portion of the Transaction through proceeds received from debt financing provided by third parties, prior to the execution
and delivery of this Agreement Purchaser has furnished to the Company fully executed copies of the debt commitment letters relating
to such financing with conditions precedent no more restrictive than the conditions to Closing contained in this Agreement. As
of the date hereof and after communicating with the institutions providing such debt financing, Purchaser knows of no facts or
circumstances (other than any that arise as a result of a breach by the Company of this Agreement) that are reasonably likely
to result in any of the conditions set forth in such commitment letters not being satisfied.

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Section
3.6                      
Legal Proceedings

.
As of the date hereof, there is no pending or, to the Knowledge of Purchaser, threatened Action or Proceeding against or relating
to Purchaser or any of its Subsidiaries, nor is there any injunction, order, judgment, ruling or decree imposed upon Purchaser
or any of its Subsidiaries, in each case, by or before any Governmental Authority, that would, individually or in the aggregate,
reasonably be expected to impair in any material respect the ability of Purchaser to perform its obligations hereunder.

Section
3.7                      
Brokers and Other Advisors

.
No broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission, or the reimbursement of expenses, in connection with the Transaction based upon arrangements
made by or on behalf of Purchaser or any of its Subsidiaries.

Section
3.8                      
No Reliance

.
Notwithstanding anything contained in this Agreement to the contrary, Purchaser acknowledges and agrees that (a) neither
the Company nor any Person on behalf of the Company is making any representations or warranties whatsoever, express or implied,
beyond those expressly made by the Company in Article II, and (b) Purchaser has not been induced by, or relied
upon, any representations, warranties or statements (written or oral), whether express or implied, made by any Person, that are
not expressly set forth in Article II of this Agreement. Without limiting the generality of the foregoing, Purchaser
acknowledges that no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or
information as to prospects with respect to the Cutanogen Business that may have been made available to Purchaser or any of its
representatives.

ARTICLE
IV

Additional Covenants and Agreements

Section
4.1                      
Reasonable Best Efforts

(a)                
Subject to the terms and conditions of this Agreement, each of the Company and Purchaser shall cooperate with the other and use
(and shall cause their respective Subsidiaries to use) their respective reasonable best efforts, to the fullest extent permitted
by applicable Law, to promptly (i) take, or cause to be taken, all actions, and do, or cause to be done, all things, necessary,
proper or advisable to cause the conditions to Closing to be satisfied as promptly as practicable and to consummate and make effective,
in the most expeditious manner practicable, the Transaction, including preparing and filing promptly and fully all documentation
to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other
documents (including any required or recommended filings under applicable Antitrust Laws), and (ii) obtain all approvals,
consents, registrations, permits, authorizations and other confirmations from any Governmental Authority or third party necessary,
proper or advisable to consummate the Transaction. For purposes hereof, "Antitrust Laws" means the Sherman Act,
as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, all applicable Foreign Antitrust
Laws and all other applicable Laws issued by a Governmental Authority that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.

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(b)                
Each of the Company and Purchaser shall use its reasonable best efforts to (i) cooperate in all respects with each other
in connection with any filing or submission with a Governmental Authority in connection with the Transaction and in connection
with any investigation or other inquiry by or before a Governmental Authority relating to the Transaction, including any proceeding
initiated by a private party, and (ii) keep the other party informed in all material respects and on a reasonably timely
basis of any material communication received by such party from, or given by such party to, the Federal Trade Commission, the
Antitrust Division of the Department of Justice, or any other Governmental Authority and of any material communication received
or given in connection with any proceeding by a private party, in each case regarding the Transaction. Subject to applicable Laws
relating to the exchange of information, each of the parties hereto shall have the right to review in advance, and to the extent
practicable each will consult the other on, all the information relating to the other party and its Subsidiaries, as the case
may be, that appears in any filing made with, or written materials submitted to, any third party and/or any Governmental Authority
in connection with the Transaction.

(c)                
In furtherance and not in limitation of the covenants of the parties contained in this Section 4.5, each of the Company
and Purchaser shall use its reasonable best efforts to resolve such objections, if any, as may be asserted by a Governmental Authority
or other Person with respect to the Transaction. Without limiting any other provision hereof, Purchaser and the Company shall
each use its reasonable best efforts to (i) avoid the entry of, or to have vacated or terminated, any decree, order or judgment
that would restrain, prevent or delay the consummation of the Transaction, including by defending through litigation on the merits
any claim asserted in any court by any Person, and (ii) avoid or eliminate each and every impediment under any Antitrust
Law that may be asserted by any Governmental Authority with respect to the Transaction so as to enable the consummation of the
Transaction to occur as soon as reasonably possible including, in the case of Purchaser, by taking all such actions, including
(x) proposing, negotiating, committing to and effecting, by consent decree, hold separate order, or otherwise, the sale,
divestiture or disposition of such assets or businesses of Purchaser (or any of its Subsidiaries) and (y) otherwise taking
or committing to take actions that limit Purchaser or its Subsidiaries' freedom of action with respect to, or its ability to retain,
one or more of its, or its Subsidiaries', businesses, product lines or assets, in each case, as may be required in order to avoid
the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other order in any Action or Proceeding,
which would otherwise have the effect of preventing or materially delaying the consummation of the Transaction.

Section
4.2                      
Public Announcements

.
The initial press release with respect to the execution of this Agreement shall be a joint press release to be reasonably agreed
upon by Purchaser and the Company. Thereafter, neither the Company nor Purchaser shall issue or cause the publication of any press
release or other public announcement (to the extent not previously issued or made in accordance with this Agreement) with respect
to this Agreement or the Transaction without the prior consent of the other party (which consent shall not be unreasonably withheld,
conditioned or delayed), except as may be required by Law, applicable fiduciary duties or by any applicable listing agreement
with the SWX as determined in the good faith judgment of the party proposing to make such release (in which case such party shall
not issue or cause the publication of such press release or other public announcement without prior consultation with the other
party to the extent reasonably practicable).

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Section
4.3                      
Access to Information; Confidentiality

.
Subject to applicable Laws relating to the exchange of information, the Company shall afford to Purchaser reasonable access during
normal business hours to the officers, employees, accountants, properties, books, Contracts and records of the Company relating
to the Cutanogen Business, and the Company shall furnish promptly to Purchaser other information concerning the Cutanogen Business
as Purchaser may reasonably request; provided, however, that the Company shall not be obligated to provide such
access or information if the Company determines, in its reasonable judgment, that doing so would violate applicable Law or a Contract
or obligation of confidentiality owing to a third party or jeopardize the protection of an attorney-client privilege. Until the
Closing Date, the information provided pursuant to this Agreement will be subject to the terms of the Confidentiality Agreement,
dated as of [_______], between Purchaser and the Company (as it may be amended from time to time, the "Confidentiality
Agreement"), which shall survive the termination of this Agreement in accordance with the terms of the Confidentiality
Agreement.

Section
4.4                      
Notification of Certain Matters

.
The Company shall give prompt notice to Purchaser, and Purchaser shall give prompt notice to the Company, of (i) any notice
or other communication received by such party from any Governmental Authority in connection with the Transaction or from any Person
alleging that the consent of such Person is or may be required in connection with the Transaction, and (ii) any Actions or
Proceedings commenced or, to such party's Knowledge, threatened against, relating to or involving or otherwise affecting such
party or any of its Subsidiaries which, in the case of either clause (i) or (ii), would reasonably be expected to have a Material
Adverse Effect or prevent or materially delay consummation of the Transaction.

Section
4.5                      
Fees and Expenses

.
Except as provided in Section 7.3, all fees and expenses incurred in connection with this Agreement and the Transaction
shall be paid by the party incurring such fees or expenses, whether or not the Transaction are consummated.

ARTICLE
V

Conditions 

Section
5.1                      
Conditions to the Obligations of Each Party

.
The respective obligations of each party hereto to consummate the Transaction shall be subject to the satisfaction (or waiver,
if permissible under applicable Law) on or prior to the Closing Date of the following conditions:

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(a)                
The Company Stockholder Authorization shall have been obtained.

(b)                
No Law, injunction, judgment or ruling enacted, promulgated, issued, entered, amended or enforced by any Governmental Authority
(collectively, the "Restraints") shall be in effect enjoining, restraining, preventing or prohibiting consummation
of the Transaction or making the consummation of the Transaction illegal.

(c)                
All consents, approvals and actions of, filings with and notices to any Governmental Authority required of Purchaser, the Company
or any of their respective Subsidiaries to consummate the Transaction, the failure of which to be obtained or taken would be reasonably
expected to have a Material Adverse Effect or an adverse effect on the ability of Purchaser and the Company to consummate the
Transaction, shall have been obtained; provided that no such consent, approval, action, filing or notice under the Foreign
Antitrust Laws shall be a condition to either party's obligations to consummate the Transaction. Without limiting the foregoing,
any applicable waiting period under the HSR Act (and any extension thereof) shall have expired or terminated.

(d)                
The Purchaser shall have delivered a fully executed original copy of each of (i) the Consulting Agreement (“Consulting
Agreement”) dated February 2, 2006 between Steven T. Boyce and Cambrex BioScience Walkersville, Inc. and (ii) the Stock
Purchase Agreement (“SPA”) dated February 2, 2006 between certain Sellers and Cambrex BioScience Walkersville,
Inc. regarding the sale of Cutanogen reflecting an assignment of both Agreements to Purchaser. Additionally, the SPA shall be
revised so that such assignment allows Company to have no liability under said SPA.

(e)The
achievement of certain milestones included in the License and SPA.

 

Section
5.2                      
Conditions to the Obligations of Purchaser

.
The obligations of Purchaser to consummate the Transaction shall be subject to the satisfaction (or waiver, if permissible under
applicable Law) on or prior to the Closing Date of the following conditions:

(a)                
Each of the representations and warranties of the Company set forth in this Agreement shall be true and correct at and as of the
Closing Date as if made on such date (other than those representations and warranties that address matters only as of a particular
date, which shall be true and correct as of such date), except (x) for changes permitted by this Agreement or (y) where
the failure of any such representation or warranty to be true and correct (without giving effect to any limitation as to "materiality"
or " Material Adverse Effect" set forth therein) would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and Purchaser shall have received a certificate of an executive officer of the Company to that
effect.

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(b)                
The Company shall have performed or complied with in all material respects all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing Date; and Purchaser shall have received a certificate of an
executive officer of the Company to that effect.

Section
5.3                      
Conditions to the Obligations of the Company

The obligations of the Company to consummate the Transaction shall be subject to the satisfaction (or waiver, if permissible under
applicable Law) on or prior to the Closing Date of the following conditions:

(a)                
Each of the representations and warranties of Purchaser set forth in this Agreement shall be true and correct at and as of the
Closing Date as if made on such date, except where the failure of any such representation or warranty to be true and correct would
not, individually or in the aggregate, reasonably be expected to impair the ability of Purchaser to perform its obligations hereunder
or prevent or materially delay consummation of the Transaction; and the Company shall have received a certificate of an executive
officer of Purchaser to that effect.

(b)                
Purchaser shall have performed or complied with in all material respects all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing Date; and the Company shall have received a certificate of an
executive officer of Purchaser to that effect.

Section
5.4                      
Frustration of Closing Conditions

Neither
the Company nor Purchaser may rely on the failure of any condition set forth in Section 5.1, 5.2 or 5.3,
as the case may be, to be satisfied if such failure was caused by such party's failure to use reasonable best efforts to
consummate the Transaction, to the extent required by and subject to Section 4.4 and the other applicable
provisions of Article IV.

ARTICLE
VI
 TAX MATTERS

Section
6.1                      
Tax Filings

.

(a)After
the Closing, Purchaser shall prepare and file, or cause to be prepared and filed, on behalf of Cutanogen all Cutanogen Tax Returns
(if necessary), and pay (or cause to be paid) all Taxes shown due on such Tax Returns.

(b)To
the extent permitted by applicable Law or administrative practice of any Taxing Authority, any transactions involving Cutanogen
that are not in the ordinary course of business occurring on the Closing Date but after the Closing shall be reported on Purchaser's
consolidated United States federal income Tax Return to the extent permitted by Treasury Regulation §1.1502-76(b)(1)(ii)(B).

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(c)Purchaser
and the Company agree to furnish or cause to be furnished to each other, and each at its own expense, as promptly as practicable,
such information (including access to books and records) and assistance, including making employees available on a mutually convenient
basis to provide additional information and explanations of any material provided relating to Cutanogen, as is reasonably necessary
for the filing of any Tax Returns, for the preparation for any audit and for the prosecution or defense of any Action or Proceeding
relating to any adjustment or proposed adjustment with respect to Taxes. Purchaser shall retain in its possession, and shall provide
the Company reasonable access to (including the right to make copies of), such supporting books and records and any other materials
that the Company may specify with respect to matters relating to Taxes for any taxable period ending on or prior to or which includes
the Closing Date until the relevant statute of limitations has expired. After such time, Purchaser may dispose of such material;
provided, that prior to such disposition Purchaser shall give the Company a reasonable opportunity at its expense to take
possession of such materials.

(d)Neither
Purchaser nor any Affiliate or successor of Purchaser shall amend, refile or otherwise modify any Tax Return relating in whole
or in part to Cutanogen with respect to any taxable year or period ending on or before December 31, 2007, without the prior written
consent of the Company.

Section
6.2                      
Certain Other Taxes

.
All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest)
incurred in connection with this Agreement, if any, shall be paid 50% by Purchaser and 50% by the Company, and the party obligated
under applicable Law to file all necessary Tax Returns and other documentation with respect to any such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, shall file such Tax Returns or other documentation and, if required
by applicable Law, the other party will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other
documentation and will cooperate with the other party to take such commercially reasonable actions as will minimize or reduce
the amount of such Taxes or fees.

Section
6.3                      
Tax Audits.

(a)                
The Company shall have the sole right (but not the obligation) to represent the interests of Cutanogen in any audit or administrative
or court proceeding relating to (i) Taxes described in Section 6.1(a) and (ii) with respect to all other
Taxes, Taxes for taxable periods ending on or before December 31, 2007 and, in each case, the Company shall have the right to
employ counsel of its choice at its expense.

(b)                
Purchaser shall have the sole right to represent the interests of Cutanogen in all other audits or administrative or court proceedings
relating to Taxes. 

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(c)                
The Company, on the one hand, and Purchaser, on the other hand, shall not enter into any compromise or agree to settle any claim
pursuant to any Tax audit or proceeding which would adversely affect the other party without the written consent of the other
party.

Section
6.4                      
Indemnification.

After
the Closing Date, Purchaser shall, to the fullest extent permitted by applicable Law, indemnify and hold harmless the Company
and its Affiliates from and against any and all Tax Losses arising out of or relating to any Taxes of Cutanogen.

Section
6.5                      
Refunds

.
Any refunds of Taxes (together with any interest with respect thereto) paid to or in respect of Cutanogen (including any amounts
credited against income Tax to which Purchaser, its Affiliates) and that relate to Taxes for which the Company is responsible
pursuant to this Article VI shall be for the account of the Company. Purchaser shall pay over to the Company any such
refund or the amount of any such credit (in each case, together with any interest with respect thereto) within fifteen (15) days
after receipt or entitlement thereto. Purchaser shall, if the Company so requests and at the Company's expense, prepare, execute
and file any claims for refunds or credits, to which the Company is entitled under this Section. Purchaser shall permit the Company
to control the prosecution of any such refund.

Section
6.6                      
Certain Elections and Other Tax Matters

(a)                
At the Company's request, Purchaser shall make or join in making any elections under Section 338 of the Code (and any comparable
election under any relevant state or local Law) (a "Section 338 Election") with respect to the purchase and sale
of the Cutanogen Shares. In no event shall Purchaser make a Section 338 Election with respect to Cutanogen without the prior written
consent of the Company. If the Company shall decide to make one or more Section 338 Elections, it shall notify Purchaser in writing
of such decision within sixty (60) days after the Closing Date. If, pursuant to this Section, the Company determines to make a
Section 338 Election, the Company shall propose an allocation of the applicable Purchase Price (which, for this purpose, shall
include any liabilities properly taken into account for purposes of determining the purchase price under Code Section 338) in
accordance with Code Section 1060 and the Treasury Regulations promulgated thereunder (and any similar provision of state, local
or foreign Law, as appropriate), and shall notify Purchaser in writing of such proposed Purchase Price allocation within thirty
(30) days following delivery of the notification of the Company's decision to make a Section 338 Election. The parties shall cooperate
in good faith to agree on an allocation of the Purchase Price and, once agreed to, the allocation shall be binding on the parties
(the "Allocation"). Additionally, the parties agree to share equally the total benefit received or achieved by
the parties as a result of such Section 338 Election. If the parties cannot agree upon the Allocation within thirty (30) days
following the Company's delivery of its proposed allocation to Purchaser, the parties shall submit any disputes to three
(3) Independent Accountants. The Independent Accountants shall finally and conclusively resolve any disputed matters in accordance
with Code Section 1060 within thirty (30) days following receipt of the submission. Purchaser and the Company shall report and
file Tax Returns (including but not limited to Internal Revenue Service Form 8594) in all respects and for all purposes consistent
with the Allocation. Neither Purchaser nor the Company shall take any position (whether in audits, Tax Returns or otherwise) that
is inconsistent with the Allocation unless required to do so by applicable Law. Within 180 days following the Closing, the Company
shall deliver to Purchaser IRS Form 8023 (or applicable successor form) for which a Section 338 Election is made, fully executed
by the Company or other applicable sellers pursuant to the requirements stated therein.

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(b)                
It is the intention of the parties to treat any indemnity payment made under this Article VI as an adjustment to the
Purchase Price for all federal, state, local and foreign Tax purposes, and the parties agree to file their Tax Returns accordingly.

(c)                
At least five (5) business days prior to the Closing, the Company shall deliver to Purchaser a schedule setting forth the allocation
of the Purchase Price, which allocation shall be binding on the parties.

ARTICLE
VII
 Indemnification

Section
7.1                      
Indemnification by the Company

.
Following the Closing, except with respect to Taxes (which shall be governed exclusively by Article VI), , the Company
shall, to the fullest extent permitted by applicable Law, indemnify, defend and hold harmless Purchaser, each Affiliate of Purchaser
and each of their respective directors, officers, successors and assigns (the "Purchaser Indemnitees") from and
against any and all Losses suffered or incurred by any of the Purchaser Indemnitees arising out of or resulting from the breach
of any representation or warranty made by Company in Article II of this Agreement. All such representations and warranties will
survive the Closing and remain in full force and effect for a period of ninety (90) days following the Closing Date.

Section
7.2                      
Indemnification by Purchaser

.
Following the Closing, except with respect to Taxes (which shall be governed exclusively by Article VI), Purchaser
shall, to the fullest extent permitted by applicable Law, indemnify, defend and hold harmless the Company, each Affiliate of the
Company and each of their respective directors, officers, employees, successors and assigns (the "Company Indemnitees")
from and against any and all Losses suffered or incurred by any of the Company Indemnitees arising out of or resulting from any
Cutanogen Liability (including, without limitation, arising out of the failure of Purchaser or Cutanogen to pay, perform or otherwise
discharge when due any such Cutanogen Liability), whether arising prior to, on or after the Closing. This indemnity shall also
apply in the event of the Purchaser’s breach of any representation or warranty that it has made in Article III of this Agreement.
All such representations and warranties will survive the Closing and remain in full force and effect for a period of ninety (90)
days following the Closing Date.

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Section
7.3                      
Limitations on Indemnification Obligations

.
The amount which any party (an "Indemnifying Party") is or may be required to pay to any other party (an "Indemnitee")
pursuant to Section 7.1 or Section 7.2 shall be reduced (including, without limitation, retroactively)
by any Insurance Proceeds or other amount actually recovered by or on behalf of such Indemnitee, in reduction of the related Loss.
If an Indemnitee shall have received the payment required by this Agreement from an Indemnifying Party in respect of any Loss
and shall subsequently actually receive Insurance Proceeds or other amounts in respect of such Loss, then such Indemnitee shall
pay to such Indemnifying Party a sum equal to the amount of such Insurance Proceeds or other amounts actually received (up to
but not in excess of the amount of any indemnity payment made hereunder). An insurer who would otherwise be obligated to pay any
claim shall not be relieved of the responsibility with respect thereto, or, solely by virtue of the indemnification provisions
hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or any other
third party shall be entitled to a "windfall" (i.e., a benefit they would not be entitled to receive in the absence
of the indemnification provisions) by virtue of the indemnification provisions hereof.

Section
7.4                      
Procedures for Indemnification of Third Party Claims

.
Procedures for indemnification of Third Party Claims shall be as follows:

(a)                
If an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including, without limitation, any Governmental
Authority) who is not a party to this Agreement of any claim or of the commencement by any such Person of any Action or Proceeding
(a "Third Party Claim") with respect to which an Indemnifying Party may be obligated to provide indemnification
pursuant to Section 7.1 or Section 7.2, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that the failure of any Indemnitee to give notice
as provided in this Section 7.4(a) shall not relieve the related Indemnifying Party of its obligations under this
Article VII, except to the extent that such Indemnifying Party is prejudiced by such failure to give notice. Such
notice shall describe the Third Party Claim in reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.

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(b)                
An Indemnifying Party may elect to defend or to seek to settle or compromise, at such Indemnifying Party's own expense and by
such Indemnifying Party's own counsel, any Third Party Claim. Within thirty (30) days after the receipt of notice from an Indemnitee
in accordance with Section 7.4(a) (or sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the Indemnitee whether the Indemnifying Party will assume responsibility for defending such Third Party Claim.
After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third Party Claim, such Indemnifying
Party shall not be liable to such Indemnitee under this Article VII for any legal or other expenses (except expenses
approved in advance by the Indemnifying Party) subsequently incurred by such Indemnitee in connection with the defense thereof;
provided that if the defendants in any such claim include both the Indemnifying Party and one or more Indemnitees and in
any Indemnitee's reasonable judgment a conflict of interest between one or more of such Indemnitees and such Indemnifying Party
exists in respect of such claim, such Indemnitees shall have the right to employ separate counsel to represent such Indemnitees
and in that event the reasonable fees and expenses of such separate counsel (but not more than one separate counsel reasonably
satisfactory to the Indemnifying Party) shall be paid by such Indemnifying Party. If an Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim, or fails to notify an Indemnitee of its election as provided in this Section 7.4(b),
such Indemnitee may defend or (subject to the remainder of this Section 7.4(b) and Section 7.4(d)) seek
to compromise or settle such Third Party Claim at the expense of the Indemnifying Party. Neither an Indemnifying Party nor an
Indemnitee shall consent to entry of any judgment or enter into any settlement of any Third Party Claim which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or settlement by the Indemnitee, of a written release
from all Liability in respect to such Third Party Claim.

(c)                
If an Indemnifying Party chooses to defend or to seek to compromise or settle any Third Party Claim, the related Indemnitee shall
make available to such Indemnifying Party any personnel or any books, records or other documents within its control or which it
otherwise has the ability to make available that are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third Party Claim.

(d)                
Notwithstanding anything in this Section 7.4 to the contrary, neither an Indemnifying Party nor an Indemnitee may
settle or compromise any claim over the objection of the other; provided, however, that consent to settlement or
compromise shall not be unreasonably withheld, conditioned or delayed. If an Indemnifying Party notifies the related Indemnitee
in writing of such Indemnifying Party's desire to settle or compromise a Third Party Claim on the basis set forth in such notice
(provided that such settlement or compromise includes as an unconditional term thereof the giving by the claimant or plaintiff
of a written release of the Indemnitee from all Liability in respect thereof) and the Indemnitee shall notify the Indemnifying
Party in writing that such Indemnitee declines to accept any such settlement or compromise, such Indemnitee may continue to contest
such Third Party Claim, free of any participation by such Indemnifying Party, at such Indemnitee's sole expense. In such event,
the obligation of such Indemnifying Party to such Indemnitee with respect to such Third Party Claim shall be equal to (i) the
costs and expenses of such Indemnitee prior to the date such Indemnifying Party notifies such Indemnitee of the offer to settle
or compromise (to the extent such costs and expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (x) the
amount of any offer of settlement or compromise which such Indemnitee declined to accept and (y) the actual out-of-pocket
amount such Indemnitee is obligated to pay subsequent to such date as a result of such Indemnitee's continuing to pursue such
Third Party Claim.

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(e)                
In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Third Party Claim, such Indemnifying
Party shall, to the fullest extent permitted by applicable Law, be subrogated to and shall stand in the place of such Indemnitee
as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Third Party
Claim against any claimant or plaintiff asserting such Third Party Claim or against any other Person. Such Indemnitee shall cooperate
with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right or claim.

Section
7.5                      
Other Procedures for Indemnification

(a)                
Any claim on account of a Loss which does not result from a Third Party Claim shall be asserted by written notice given by the
Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have a period of thirty (30) days after the receipt
of such notice within which to respond thereto. If such Indemnifying Party does not respond within such thirty (30) day period,
such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment. If such Indemnifying Party does
not respond within such thirty (30) day period or rejects such claim in whole or in part, such Indemnitee shall be free to pursue
such remedies as may be available to such party under this Agreement or under applicable Law.

(b)                
In addition to any adjustments required pursuant to Section 7.3, if the amount of any Loss shall, at any time subsequent
to the payment required by this Agreement, be reduced by recovery, settlement or otherwise, the amount of such reduction, less
any expenses incurred in connection therewith, shall promptly be repaid by the Indemnitee to the Indemnifying Party.

Section
7.6                      
Remedies Cumulative

.
The remedies provided in this Article VII shall be cumulative and shall not preclude assertion by an Indemnitee of
any other rights or the seeking any and all other remedies against any Indemnifying Party.

Section
7.7                      
Survival of Indemnities

.
The obligations of each of the parties under this Article VII shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities with respect to any Loss of the other related to such assets,
businesses or Liabilities.

Section
7.8                      
Limitation of Liability

.
In no event shall an Indemnifying Party be liable under this Article VII for any special, consequential, indirect,
incidental or punitive damages or lost profits, however caused and on any theory of Liability (including, without limitation,
negligence) arising in any way out of this Article VII, whether or not such party has been advised of the possibility
of such damages; provided, however, that the foregoing limitations shall not limit each party's indemnification
obligations for Liabilities to third parties as set forth in this Article VII.

    	196

    	 

    

ARTICLE
VIII

Miscellaneous

Section
8.1                      
Survival of Representations, Warranties and Agreements

The representations and warranties contained herein or in any other writing delivered pursuant hereto, as well as any covenant
or agreement of the parties that by its terms contemplates performance exclusively prior to the Closing Date, shall survive until
(but not beyond) the Closing Date. Nothing in this paragraph shall limit any covenant or agreement of the parties that by its
terms contemplates performance in whole or in part after the Closing Date.

Section
8.2                      
Amendment or Supplement

At any time prior to the Closing Date, this Agreement may be amended or supplemented in any and all respects, whether before or
after authorization of the Transaction by the holders of Company Common Stock, by written agreement of the parties hereto, by
action taken by their respective boards of directors; provided, however, that following the Company Stockholder
Authorization, there shall be no amendment or change to the provisions hereof which by Law or in accordance with the rules of
any relevant stock exchange would require further approval by the holders of Company Common Stock without such approval.

Section
8.3                      
Extension of Time, Waiver, Etc

At any time prior to the Closing Date, any party may, subject to applicable Law, (a) waive any inaccuracies in the representations
and warranties of the other party hereto, (b) extend the time for the performance of any of the obligations or acts of the
other party hereto or (c) waive compliance by any other party with any of the agreements contained herein or, except as otherwise
provided herein, waive any of such party's conditions; provided that after the Company Stockholder Authorization is obtained,
there may not be any extension or waiver of this Agreement or any portion thereof which, by Law or in accordance with the rules
of any relevant stock exchange, requires further approval by such stockholders. Notwithstanding the foregoing, no failure or delay
by the Company or Purchaser in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed
on behalf of such party.

Section
8.4                      
Assignment

Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by any
of the parties without the prior written consent of the other party; provided that such consent shall not be required (a) for
assignments and transfers by operation of Law and (b) in the event the Company assigns any or all of its rights, interests
and obligations hereunder to a Person with whom the Company merges or to whom the Company sells all or substantially all of its
assets or to an Affiliate of Company. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties hereto and their respective successors and permitted assigns. Any purported assignment
not permitted under this section shall be null and void.

    	197

    	 

    

 

Section
8.5                      
Counterparts

This Agreement may
be executed in counterparts (each of which shall be deemed to be an original but both of which taken together shall constitute
one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the parties and
delivered to the other party.

Section
8.6                      
Entire Agreement; No Third Party Beneficiaries

This Agreement, together with the Schedules, the Disclosure Letter and the Confidentiality Agreement, (a) constitutes the
entire agreement, and supersedes all other prior agreements and understandings, both written and oral, between the parties, or
any of them, with respect to the subject matter hereof and thereof and (b) are not intended to and shall not confer upon
any Person other than the parties hereto any rights or remedies hereunder.

Section
8.7                      
Governing Law; Submission to Jurisdiction; Appointment of Agent for Service of Process; Waiver of Jury Trial.

(a)                
This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New Jersey, without regard to
principles of conflict of Laws that would require the application of the Laws of another jurisdiction. The parties hereto hereby
declare that it is their intention that this Agreement shall be regarded as made under the Laws of the State of New Jersey and
that the Laws of said State shall be applied in interpreting its provisions in all cases where legal interpretation shall be required.
Each of the parties hereto hereby irrevocably and unconditionally agrees (i) to be subject to the jurisdiction of the courts
of the State of New Jersey and of the federal courts sitting in the State of New Jersey.

(b)                
The parties hereto hereby agree to bring all Actions and Proceedings arising out of or relating to this Agreement in the Courts
of the State of New Jersey, and the parties irrevocably waive, to the fullest extent permitted by applicable Law, the defense
of an inconvenient forum to the maintenance of any such Action or Proceeding. The parties hereto agree that a final judgment in
any such Action or Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by applicable Law.

(c)                
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATED TO THIS AGREEMENT.

Section
8.8                      
Specific Enforcement

.
The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall, to the fullest
extent permitted by applicable Law, be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the Chancery Court of the State of Delaware, without bond or other
security being required, this being in addition to any other remedy to which they are entitled at Law or in equity.

    	198

    	 

    

 

Section
8.9                      
Notices

All notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered
personally, facsimiled (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following
addresses:

If to Purchaser,
to: _______________________

Attention:
________________

with
a copy (which shall not constitute notice) to: _______________________

Attention:
________________

If to the
Company, to:[COMPANY]

_______________________

Attention:
________________

with a copy
(which shall not constitute notice) to:

 

or
such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other party hereto.
All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if
received prior to 5 P.M. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.

 

Section
8.10                   Severability

If any term or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of Law or public policy, all other terms, provisions and conditions of this Agreement
shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent permitted by applicable Law in an acceptable manner
to the end that the Transaction is fulfilled to the extent possible.

Section
8.11                   Definitions

(a)                
As used in this Agreement, the following terms have the meanings ascribed thereto below:

"Action
or Proceeding" shall mean any action, suit, proceeding, arbitration or Governmental Authority investigation.

    	199

    	 

    

 

"Affiliate"
shall mean, as to any Person, any other Person that directly or indirectly controls, or is controlled by, or is under common control
with, such Person. For this purpose, "control" (including, with its correlative meanings, "controlled by"
and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or cause
the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership
interests, by Contract or otherwise.

"Cutanogen
Liability" shall mean any Liability relating to, arising out of or resulting from any action, inaction, event, omission,
condition, fact or circumstance occurring or existing prior to, on or after the Closing, in each case to the extent such Liability
relates to, arises out of or results from any of the assets or property of Cutanogen.

"
Material Adverse Effect" shall mean any change, event or occurrence which has a material adverse effect on the Cutanogen
Business when taken as a whole, other than changes, events, occurrences or effects arising out of, resulting from or attributable
to (i) changes in conditions in the United States or global economy or capital or financial markets generally, including
changes in interest or exchange rates, (ii) changes in general legal, regulatory, political, economic or business conditions
or changes in generally accepted accounting principles that, in each case, generally affect industries in which Cutanogen conducts
business, provided that such changes do not affect Cutanogen in a disproportionate manner.

"
Transaction" refers collectively to this Agreement and the transactions contemplated hereby to take place on the Closing
Date, including the purchase and sale of the Cutanogen Shares.

"business
day" shall mean a day except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York are
authorized or required by Law to be closed.

"Code"
shall mean the Internal Revenue Code of 1986, as amended.

"Company
Board" shall mean the board of directors of the Company or any duly constituted committee thereof which has been given
the authority to act in the name, place and stead of the board of directors of the Company with respect to this Agreement, the
Transaction and the transactions contemplated thereby.

"Company
Common Stock" shall mean the voting common stock, $0.10 par value, of the Company.

"Company
Liability" shall mean any Liability of the Company.

"GAAP"
shall mean generally accepted accounting principles in the United States.

    	200

    	 

    

 

"Governmental
Authority" shall mean any government, court, regulatory or administrative agency, commission or authority or other
governmental instrumentality, federal, state or local, domestic, foreign or multinational.

"HSR
Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

"Indebtedness"
of any Person means all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures
or similar instruments, (iii) under capital leases and (iv) in the nature of guarantees of the obligations described
in clauses (i) through (iii) above of any other Person.

"Insurance
Proceeds" shall mean those monies (i) received by an insured from an insurance carrier or (ii) paid by an insurance
carrier on behalf of the insured, in either case net of any applicable premium adjustments, retrospectively rated premium adjustments,
deductibles, retentions or costs paid by such insured.

"Knowledge"
shall mean, in the case of either the Company or Purchaser, the actual knowledge, as of the date of this Agreement, of any of
the executive officers of such party.

"Liabilities"
shall mean any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured,
reserved or unreserved, or determined or determinable, including, without limitation, those arising under any Law, claim, demand,
Action or Proceeding, whether asserted or unasserted, or judgment, writ or injunction of any Governmental Authority, and those
arising under any Contract, arrangement, commitment or undertaking or any fines, damages or equitable relief which may be imposed
and including, without limitation, all costs and expenses related thereto.

"Loss"
shall mean any and all claims, actions, causes of action, Liabilities, losses, damages, and reasonable out-of-pocket expenses
and costs.

"Person"
shall mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity,
including a Governmental Authority.

"Subsidiary"
when used with respect to any party, shall mean any corporation, limited liability company, partnership, association, trust or
other entity of which securities or other ownership interests representing more than 50% of the equity and more than 50% of the
ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) are, as of such date,
owned by such party or one or more Subsidiaries of such party or by such party and one or more Subsidiaries of such party.

"Taxing
Authority" means any Governmental Authority and any other quasi-governmental or non-governmental body administering,
regulating or having general responsibility for the imposition of any Tax.

 

Section
8.12                   Interpretation.

(a)                
The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation".
The words "hereof", "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms
defined in this Agreement shall have the defined meanings when used in any document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined
or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute
as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent
and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments
incorporated therein. References to a Person are also to its permitted successors and assigns.

(b)                
The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and
no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of
this Agreement.

 IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

 

	REGENICIN,
    INC.
	
	By:
	Name:
	Title:
	LONZA
    WALKERSVILLE, INC.
	
	By:
	Name:
	Title:

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