March 19 2018

US Securities amp Exchange Commission

Office of FOIA and Privacy Act Operations

100 FStreet NE Mail Stop 5100 EIVEl Washington DC 20549-5100

HAR 19 2018

Dear FOIA Office

Under the Freedom of Information Act (FOIA) please send a copy of the following

A copy of Exhibit 1040 to the form l0KSBA filed by PROTEIN POLYMER TECHNOLOGIES INC on March 5

2003

In the event confidential treatment has not expired provide the specific date for which confidential

treatment is still in effect I do not need a copy of the order We authorize up to $6100 in processing

fees Thank You

Paul DSouza

Edi tor - Deals

Clarivate Analytics Friars House 160 Blackfriars Road London UK SE1 8EZ

Phone+44-2074334789 pauldsouzaclarivatecom

13

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

STATION PLACE 100 F STREET NE

WASHINGTON DC 20549-2465

Office of FOIA Services April 19 2018

Mr Paul DrsquoSouza Clarivate Analytics160 Blackfriars Road London UK SE18EZ

RE Freedom of Information Act (FOIA) 5 USC sect 552Request No 18-03326-E

Dear Mr DrsquoSouza

This letter is in response to your request dated andreceived in this office on March 19 2018 for Exhibit 1040 tothe Form 10KSBA filed by Protein Polymer Technologies Inc onMarch 5 2003

Your request is granted in full We are enclosing 18 pages with this letter Please be advised some of the text has beenmarked through and some exhibit pages are blank This is our best available copy of the requested exhibit

If you have any questions please contact me atGbenouasecgov or (202) 551-5327 You may also contact me at foiapasecgov or (202) 551-7900 You also have the right toseek assistance from Jeffery Ovall as a FOIA Public Liaison orcontact the Office of Government Information Services (OGIS) fordispute resolution services OGIS can be reached at 1-877-684-6448 or Archivesgov or via e-mail at ogisnaragov

Sincerely

Amy Gbenou Amy GbenouFOIA Research Specialist

Enclosure

03132002 2005 18585585477 PPTI PAGE 0219

___ ESCROW AGREElVIENT

TfilS ESCROW AGREEMENT is made as of April 12 2001 (the Effective Date) by and among SPINE WAVE INC a Delaware corporation (Company) and PROTEIN middot POLYMER TECHNOLOGIES INC a Delaware corporation C~PPTr) and the party identified on Exhibi~ A attached hereto (ltEscrow Agenf)

WHEREAS in connection with the License Agreement between Company and PPTI (License Agreement) and Supply and Services Agreement between PPTI and Company (Supply Agreemenf) PPTI has agreed to enter into this Escrow Agreement pursuant to which bull PPTI shall deposit into escrow when required (i) the Gene Construction Technology Escrow Jlfaterials described on Schedule 1 attached hereto (ii) the bullBiomechanical Standard Formulation(s) Escrow Materials described on Schedule 2 attached hereto (iii) the Commercifll Production Escrow Jrfaterials described on Schedule~ attached hereto and (iv) the Protein Polymer Design and Szpply Escrow ]Jfaterials described on Schedule 4 attached hereto (Geue Construction Technology Escrow Materials Biomechanical Standard Fonnulation(s) Escrow Materials Commercial Production Escrow Materials and Protein Polymer Design and Supply Escrow Materials are collectively -referred to as the Escrow Materials)

NOV THEREFORE the parties hereto agree as follows

l Appointment of Escrow Agent Within thirty (30) days afterthe Effective Date middot- _

Company shall select and appoint an Escrow Agent which appointment shall be subject to the consent of PPTI suchconsent not to be unreasonably withheld conditioned or delayed The Escrow Agent must certify to the parties that it has and will have at all times during the terin of the escrow liquid nitrogen storage capabilities and that itwill use such capabilities to hold the cell bank samples which are part of the Escrow Materials Upon such appointment the Escrow Agent shall executea copy of Exhibit A (duly filled in with the information specified thereon) whereupon the Escrow Agent shall becomea party to this Agreement

2 Deposit b-LPPTI

(a) In accordance with the requirements set forth in the applicable middotschedules attached heretomiddot and provided that the Escrow Agent has been appointed executed a copy of

Exhibit A and has become a party to this Agreement PPTI will (i) deposit in escrow with the Escrow Agent the applicable Escrow Materials to be held subject to the terms and conditions of this Escrow Agreement and (ii) provide to Company a schedule ofEscrow Materials so deposited The schedule shall itself con_stitute Know-How (as defined in the License Agreement) and shall be kept confidential PPTI shall upon placing each cell bank samp le into escrow so notify Company of such deposit in writing PPT agrees to replace the deposited cell bank samples with a newly-generated set of cell bank samples ifPPTI based on quality control testing of Product mam1factured from cognate cells shall detennine that the cells in the cell bank sample are not viable in which case Company shall give its written instructions pursuant to Section 4 hereof PPTI shall upon each replacement of a cell bank sample so notify Company of such

deposit in writing

03132002 2005 1El585585477 PPTI PAGE 03lg

middotbull

middot---middot tb) PPTI shall promptly and regularly update the Escrow Materials no htss frnq11eady tllm Qs an amp~al basi~ 1-vith any infoanation and other materials developed discovered or determined subsequent to the Initial Deposit and vithin the scope of the Escrow Materials as described on the Schedules) and deposit a vvritteu copy ofsuch updated material with the Escrow Agent to become upon deposit part of the Escrow lvfaterials and to be held pursuant to the terms of this Agreement Company at its own expense) may designate a neutral third party who shall audit the Escrow Materials on deposit with the Escrow Agent for purposes ofdetennining_whether PPTI has fulfilled its deposit obligations and whether such Escrow Materials provide suffici~nt Know-How to Company to construct genes manufacture protein polymers anq perform other similar objectives in the manner contemplated under this Agreement the Supply Agreement or any agreement contemplated by the Supply Agreement PPTI shall promptly correct any deficiency disclosed by the audit (and where appropriate the term Escrow Materials shall include any such updated materials from time~to~tirne) PPTI shall upon each updating of the Escrow Materials so notify Company of such fact in writing and give it the same verification opportunity as is provided above Company may at its sole cost and expense obtain such insurance as it deems reasonable and necessary regarding the Escrow Materials

3 Representation PPTI represents and vvarrants to Company that the Escrow Materials when deposited are and will be accurate and complete in all material respects that in its reasonable opinion the Escrow Materials when deposited will be sufficiently complete clear and detailed so that they can be readily followed and carried out by a trained scientist in order to

___ ~ allow Company to exercise its rights under the License Agreement PPTI further represents and warrants to Company that any deposited cell bank sarnples (including any replacement cell bank samples deposited pursuant to Section 2) will be free ofmaterial defects and will be viable at the time of deposit

middotmiddotmiddot

4 Custodv Access Escrow Agent agrees to accept deposit ofEscrow Materials and to act as its custodian until the escrow is terminated pursuant to the terms ofthis Escrow Agreement Except as otherwise provided in this Escrow Agreement Escrow Agent shall not permit (i) any party access to the Escrow Materials andmiddot (ii) any copies to be made of the Escr9w Materials deposited hereunder Escrow Agent shall not open the sealed receptacles containing cell bank samples forming a part of the Escrow Materials except upon receipt ofmutual writtenmiddot instructions from PPTI and Company middot

5 Re]ease of Escrow Materials

(a) To Company Escrow Agent shall release and deliver the Escrow Materials to Company upon the occurrence of any of the following events provided that ifPPTI disputes the release event under this Section then Escrow Agent shall not release the Escrow ~aterials until the dispute is resolved pursuant to Section 9(c) hereof

(i) Upon the written instructions of PPTI

(ii) Upon delivery to the Escrow Agent of(A) a copy of an order judgment or decree adjudicating PPTI bankrupt or insolvent (B) vritten notice that PPTI has commenced any casegt proceeding or other action relating to it in bankruptcy or seeking

2

03132002 2005 1El585585477 PPTI PAGE 03lg

middotbull

middot---middot tb) PPTI shall promptly and regularly update the Escrow Materials no htss frnq11eady tllm Qs an amp~al basi~ 1-vith any infoanation and other materials developed discovered or determined subsequent to the Initial Deposit and vithin the scope of the Escrow Materials as described on the Schedules) and deposit a vvritteu copy ofsuch updated material with the Escrow Agent to become upon deposit part of the Escrow lvfaterials and to be held pursuant to the terms of this Agreement Company at its own expense) may designate a neutral third party who shall audit the Escrow Materials on deposit with the Escrow Agent for purposes ofdetennining_whether PPTI has fulfilled its deposit obligations and whether such Escrow Materials provide suffici~nt Know-How to Company to construct genes manufacture protein polymers anq perform other similar objectives in the manner contemplated under this Agreement the Supply Agreement or any agreement contemplated by the Supply Agreement PPTI shall promptly correct any deficiency disclosed by the audit (and where appropriate the term Escrow Materials shall include any such updated materials from time~to~tirne) PPTI shall upon each updating of the Escrow Materials so notify Company of such fact in writing and give it the same verification opportunity as is provided above Company may at its sole cost and expense obtain such insurance as it deems reasonable and necessary regarding the Escrow Materials

3 Representation PPTI represents and vvarrants to Company that the Escrow Materials when deposited are and will be accurate and complete in all material respects that in its reasonable opinion the Escrow Materials when deposited will be sufficiently complete clear and detailed so that they can be readily followed and carried out by a trained scientist in order to

___ ~ allow Company to exercise its rights under the License Agreement PPTI further represents and warrants to Company that any deposited cell bank sarnples (including any replacement cell bank samples deposited pursuant to Section 2) will be free ofmaterial defects and will be viable at the time of deposit

middotmiddotmiddot

4 Custodv Access Escrow Agent agrees to accept deposit ofEscrow Materials and to act as its custodian until the escrow is terminated pursuant to the terms ofthis Escrow Agreement Except as otherwise provided in this Escrow Agreement Escrow Agent shall not permit (i) any party access to the Escrow Materials andmiddot (ii) any copies to be made of the Escr9w Materials deposited hereunder Escrow Agent shall not open the sealed receptacles containing cell bank samples forming a part of the Escrow Materials except upon receipt ofmutual writtenmiddot instructions from PPTI and Company middot

5 Re]ease of Escrow Materials

(a) To Company Escrow Agent shall release and deliver the Escrow Materials to Company upon the occurrence of any of the following events provided that ifPPTI disputes the release event under this Section then Escrow Agent shall not release the Escrow ~aterials until the dispute is resolved pursuant to Section 9(c) hereof

(i) Upon the written instructions of PPTI

(ii) Upon delivery to the Escrow Agent of(A) a copy of an order judgment or decree adjudicating PPTI bankrupt or insolvent (B) vritten notice that PPTI has commenced any casegt proceeding or other action relating to it in bankruptcy or seeking

2

03 13 2002 20 05 18585585477 PPTI PAGE 0419

reorganizatioll liquidation~dissoluticmiddotn winding-up arrangement composition or readjustmentmiddot__ _-middot

of its debts or for any other relief under any bankruptcy insolvency reorganization liquidation dissolution arrangement composition readjustment of deb t or other similar act or law of any jurisdiction domestic or foreign now or hereafter existing (C) PPTI has applied for a receiver custodian or trustee ofit or for all or a substantial part of its property made an assignment for the benefit of its creditors or (D) written notice that a case proceeding or other action has been commenced against PPTI in b~ptcy or seeking reorganization liquidation dissolution winding-up arrangement composition or readjustment of its debts or any other relief under any bankruptcy insolvency reorganization liquidation dissolution arrmgement composition readjustmentof debt or other similar act or law of any jurisdiction domestic or foreign now or hereafterexisting or if a receiver custodian or trustee ofPPTI or for all or substantially all of iti properties shall be appointed or if a warrant of attachment execution or distraint or similar process shall be issued against any substantial part of the property ofPPTI and if in each such case in this cl~use (D) such condition shall continue for a period of 11i~ety (90) day~ undismissed undischarged or unbonded

(iii) With respect to relevant Commercial Production Escrow Materials onlygt upon delivery to Escrow Agent of vmtten notice that PPTI has failed to exercise its manufacturing option or PPTI and Company fail to reach agreement on the terins of a manufacturing supply arrangement pursuant to Section 22 of the License Agreement

(iv) With respect to Biomechanical Standard Fonnulation(s) Commercial Production and Protein Polymer D esign and Supply Services Escrow Materials~__ only tatt (1 0) busines d)3 after Company delivers to both Escrow Agent and PPTI aletter or certificate signed by the President of Company indicating that it is entitled to such Escrow Materials as a result ofamaterial breach by PPTI ofthe Supply Agreement (which breach was not cured in accordance with the applicable provisions thereof) middot-~---

(v) With respect to relevant Commercial Production Escrow Materials only tM (10) bwsinss days-after Company delivers to both Escrow Agent and PPTI a letter ~r

certificate signed by the President of Company indicating that it is entitled to such Escrow middot Materials as a result of a material breach by PPTI of a manufacturing supply a_g(eement- entered into pursuant tobull Section 22 of the License Agreement provided that PPTI shall be deemed to be in material breacmiddoth of any such agreement in the event that PPTI charges Company an amount in excess ef$~4 (r11icla nllleiwet saaJI be aaj11stga on an annWal easis to rofleot changes in the middot

middotP~odtlcer Price Index) for any 5 mL or kss container of any protein-po-lymer-with-lesamp-th-an-ershyampNfrac12Ual to 30 pf0tei5 pelymer by wefght

(vi) fen (10) 111siness deya after Company delivers to both Escrow Agent and PPTI a letter or certificate signed by the President of Company indicating that it is entitled to the Escrow Materials as a result of a material breach by PPTI of the License Agreement (which breach was not cured in accordance with the applicable provisions thereof)

(vii) With respect to Gene Construction Technology Escrow Materials only eef1 (10) bu11ines clets after Company delivers to both escrow Agent and PPTI a letter or

____ certificate signed by the President of Company indicating the compktion of Series A fin~ciag ef at leet 3J simio~ or

3

03 132002 2006 18585586477 PPTI PAGE 0519

middot__

__

(viii) middot With respect to Protein Polymer Design and Supply Escrow

Materials and on a relevant culture-by-culture and protein specific basis mo (10) b11iness dfi)S after Company delivers to both Escrow Agent and PPTI a letter or certificate signed by the President of Company of (i) initiation of interoal Design Services efforts (as provided in the

middot Supply Agreement) specifying materials that are reasonably required for such efforts or (ii) initiation ofDesign Services by a third party following PPTIs election not to provide Design Services under its Design Services rights under the Supply Agreement

(b) To PPTI Escrow Agent shall release and deliver all of the Escrow Materials to PPTI within ten ( l 0) business days after PPTI delivers to Escrow Agent and the ~ompany a letter or certificate signed by the President of PPTI indicating that it is entitled to the Escrow Materials as a result of termination or expiration of the License Agreem~nt provided that if Company disputes the release event under this Section then Escrow Agent shall not release the Escrow Materials until the dispute is resolved pursuant to Section 9(c) hereof

(c) Company agrees that Company shall not1 by virtue of the release of Escrow Materials to Company have any license or ownership rights in and to the Escrow Materials other than the rights expressly agreed upon by the parties in the License Agreement or other agreement between the parties middot

6 Termination of Escrow The escrow shall- terminate upon the earliest to occur of the following events

(a) mutual written agreement of the parties or

(b) delivery of all the Escrow Materials to Company or PPTI as the case may be in accordance with fie terms of Section 5 heref

7 Escrow Agent Fees In consideration for performing its function as escow agent Escrow Agent shall be paid solely by Company the charge for any duties required in connection with this Esc~ow Agreement middot

8 Escrow Agent

(a) The obligations ofthe Escrow Agent are those specifically provided in this Escrow Agreement and the Escrow Agent shall have no liability hereunder or duty to inquire into the terms and provisions of any other agreement including without limitation the License Agreement The duties of the Escrow Agent are purely ministerial in nature and it sh~ll not incur any liability whatsoever except for villful misconduct gross negligence or breach of Section 8(d)

(b) The Escrow Agent shall not have any responsibility for the genuineness or validity of any document or other item deposited with it or of any signature thereon and shall not have any liability for acting in accordance with any written instructions or certificates given to it hereunder and believed by it to be signed by the proper parties If the Escrow Agent shall receive conflicting instructions it shall advise Company and PPTI of such fact Company and PPTI shall have thix ty (3 0) ehey to resolve the conflicting instructions and jointly notify the

-~

4

03132002 2005 185355854 77 PPTI PAGE 0519

bull Escrow Agent If the Escrov- Agent is not timely jointly notified it may at any time thereafter submit such conflict to arbitration in accordance with the provisions ofSection 9(c)

(c) The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving at least 30 days notice of such resignation to Company and PPTI specifying a date upon which such resignation shall take effect provided~ however that the Escrow Agent shall continue t9 serve until its successor accepts the appoiutment as new Escrow Agent Upon receipt of such notice) a successor escrow agent shall be appointed by Company and PPTI such successor escrow agent to become the Escrow Agent hereunder on the resignation date specifiea in such notice If an instrument of acceptauce by a successor escrow agent shall not have been delivered to the Escrow Agent within 40 days after the giving of such potice ofresignation the resigning Escrow Agent may at the expense of Company request that an arbitrator appoint a successor escrow agent in accordance with the provisions of Section 9(c) Company and PPTI acting jointly may at any time substitute a new escrow agent by giving 10 days notice thereof to the current Escrow Agent then acting and paying all expenses of the current Escrow Agent

d) The Escrow Agent hereby agrees

(i) to maintain the Escrow Material under this Escrow Agreement in strictest confidence and secrecy

(ii) not to make use of the Escrow Materiais other than for the middotmiddot---middot performance of its obligations under this Escrow Agreement and shall not disclose or release the

same to any party othermiddot than in accordance with the terms hereof and

(iii) that the obligations imposed hereunder shall continue nob-vithstanding release of the Escrow Materials or termination of this Escrow Agreement until

middot or unless as the Escrow Materials falls within the public domain through no fault of the Escrow Agent

9 Misce1laneous

(a) Notices All notices claims certificates requests demands and other co~unications hereunder shall be in writing and shall be delivered personally or sent by facsimile transmission air courier or registered or certified mail return receipt requested addressed as follows

If to PPTI to

Protein Polymer Technologies Inc 10655 Sorrento Valley Road San Diego California 92121 Fax (619) 558-6477 Attention President

with a copy to

5

0313 2002 2006 18585586477 PPTI PAGE 0719

_

___

Piper Marbury Rudnick amp Wolfe 203 North LaSalle Str~et Chicago JL 60601

Fax (312) 630-5322 Attention John H Heuberger

If to Company to

Spine Wave Inc 12230 ElCamino Real Suite 300 San Diego California 92130 Attention David Coats Fax (858) 350-795 1

ovith a copy to

Brobeck Phleger amp Hainson LLP 12390 El Camino Real San Diego California 92130 Attention Faye H Russellgt Esq Fax (858) 720-2555

Ifto Escrow Agent to to the address specified on Exhibit A attachedhereto

or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith Any such communication shall be deemed to have been delivered (i) when delivered if delivered personally (ii) when sept (with confirmation received) if sent by facsimile transmission on a business day (iii) on the first business day after dispatch (with confirmation received) if sent by facsimile transmission on a day other than a business day (iv) on the third business day after dispatch if sent by air courier and (v) on the fifth business day after mailing if sent by registered or certified mail middot middot

(b) Severability In the event that any provision of this Escrow Agreement would be held in any jurisdiction to be invalid prohibited or unenforceable for any re35on such provision as to such jurisdiction shall be ineffecti ve1 without invalidating the remaining provisions of this Escrow Agreement or affecting the validity or enforceability ofsuch provision in any other jurisdiction Notwithstanding the foregoing ifsuch provision could be more narrowly drawn so as not to be invalid prohibited or unenforceable in such jurisdiction it shall as to such jurisdiction~ be so narrowly drawn without invalidating the remaining provisions of this Escrow Agreement or affecting the validity or enforceability of such provision in any other jurisdiction

(c) Governing Law Dispute Resolution Any controversy or claim arising out of or relating to the Escrow Agreement or the parties decision to enter into this Escrow Agreement or the breach hereof shall be settled by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association (bullAAA) and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction middot thereof Notwithstanding the forgoing to the contrary or in the arbitration rules invoked or in this

6

03132002 2005 1E585585477 PPTI PAGE 0819

Section 9(c) the parties retain the right to request a judicial authority to invoke interim measures ofprotection and such request shall not be deemed incompatible with this agreement to arbitrate or a waiver of the right to arbitrate

The arbitration shall be held in either (i) San Diego or (ii) the city in which the Companys principal place ofbusiness is located at the discretion ofthe party against whom the arbitration is sought and the arbitrator shall apply the substantive law of the State of California except that the interpretation and enforcement oftlris arbitration provision shall be govemed by the Federal Arbitration Act Tbere shall be one (1) arbitrator to be mutually agreed upon by the parties and to be selected from the Regional Panel of Distinguished Neutrals If the parties are unable to agree upon such an arbitratorwho is willing to serve within ten (10) days of receipt of a demand tomiddotarbitrate by the other party then the AAA shall appqint an arbitrator willing to serve from the stated panel or ifno such panel existsgt the parties shall within three (3) days select one of the five (5) largest international accounting firms ( excluding those prnviding services for the parties) and engage the managing partner or senior officer of its office located in the county in which the Companys principal place of business is located to designate a partner of such firm to serve as the arbitrator Failing thatgt then the AAA shall appoint an arbitrator willing to serve from the Regional Panel ofDistinguished Neutrals or if no such panel existsJ then from an appropriate AAA panel It shall be the duty of the arbitrator to set dates for preparation and hearing of any dispute and to expedite the resolution of such dispute Recognizing that the release of Escrow Materials is time critical the parties do hereby direct any arbitrator hereunder to reach a decision regarding the release of Escrow Materials (which may be a temporary or preliminary decision subject to such conditions as the arbitrator may in its sole discretion order) within 30 days following his or her engagement or appointroent

It shall be the duty of the arbitrator to set dates for preparation and hearing of any dispute and to expedite the resolution of such dispute The arbitrator shall pennit and facilitate discovery which will be conducted in accordance with the Federal Rules of Civil Procedure taking into account the needs of the parties and the desirability ofmaking discovery expediticms and cost-effective The arbitrator will set a discovery schedule with which the parties will comply and attend depositions ifrequested by either party The arbitrator will entertain such presentation of sworn testimony or evidence written briefs andor oral argument as the parties may wish to present however no testimony or exhibits will be admissible unless the adverse party was afforded an opportunity to examine such witness and to inspect and copy such exhibits during the pre-hearing discovery phase The arbitrator shall among bis other powers and authorities have the power and authority to award int_erim or preliminary reliepound The arbitrator shall not be empowered to award either party exemplary or punitive damages or any enhanced damages for willful infringement and the parties shall be deemed to have waived any right to such damages

A qualified court reporter will record and transcribe the proceedings The decision of the arbitrator will be in writing and judgment upon the award by the arbitrator may be entered into any court having jurisdiction thereof Prompt handling and disposal of the issue is important Accordingly the arbitrator is instructed to assume adequate managerial initiative and control over discovery and other aspects -of the proceeding to schedule discovery and other activities for

----~ substantially continuous work) thereby expediting the arbitration as much as is deemed

7

03132002 2005 18585585477 PPTI PAGE 0319

bull

reasonable to him but in all middotevents to effect a final award within 365 days of the ar-bitrators selection or appointment and within 20 days of the close of evidence

The proceedings shall be confidential and the arbitrator sliall issue appropriate protective orders to safeguard both parties confidential information and the Escrow Materials The fees of the arbitrator and the AAA shall be paid as designated by the arbitrator or ifhe shall not so designate they shall be split equally between the parties

(d) Binding Effect Benefits Assignment This Escrow Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted middotsuccessors and assigns Nothing contained herein shall give to any other person any benefit or any legal or equitable right remedy or claim This Escrow Agreement shall not be assignable by PPTI without the prior ivritten consent of Company which consent may be withheld in the sole discretion sf Company Notwithstanding the foregoing no consent ofCompany shall be required

middotif such assignment is in connection with the sale or transfer-of all or substantially all of the assets of PPTI or the merger or consolidation ofPPTI with or into -any other business entity Company shall be permitted to assign this Escrow Agreement upon written notice to PPTI to any party to Vhich it assigns all ofits rights under the License Agreement or sells ortransfers all or substantially all of its assets No such assignment shall relieve the assigning party of its underlying obligatfons under this Escrow Agreement

e) Entire Escrow Agreement Amendments This Escrow Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain

____ the entire understanding ofthe parties with respect to its subject matter This Escrow Agreement may be amended only by a middotwritten instrument duly executed by the parties hereto

(f) Waivers _It is further understood and agreed that no middotfailure ormiddotdelay by either party hereto in exercising any right power or privilege under this ~screw Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exerciseof any right power or privilege hereunder

(g) Counterparts This Escrow Agreement may be executed in any number of counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Escrow Agreement Each such counterpart hereof shall be deemed to be an original instrument and all such counterparts together shall constitute but one agreement

(h) Headings The article and section headings contained in this Escrow Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Escrow Agreement

[RElVIAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] -

8

03132002 2005 185355854 77 PPTI PAGE 0519

bull Escrow Agent If the Escrov- Agent is not timely jointly notified it may at any time thereafter submit such conflict to arbitration in accordance with the provisions ofSection 9(c)

(c) The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving at least 30 days notice of such resignation to Company and PPTI specifying a date upon which such resignation shall take effect provided~ however that the Escrow Agent shall continue t9 serve until its successor accepts the appoiutment as new Escrow Agent Upon receipt of such notice) a successor escrow agent shall be appointed by Company and PPTI such successor escrow agent to become the Escrow Agent hereunder on the resignation date specifiea in such notice If an instrument of acceptauce by a successor escrow agent shall not have been delivered to the Escrow Agent within 40 days after the giving of such potice ofresignation the resigning Escrow Agent may at the expense of Company request that an arbitrator appoint a successor escrow agent in accordance with the provisions of Section 9(c) Company and PPTI acting jointly may at any time substitute a new escrow agent by giving 10 days notice thereof to the current Escrow Agent then acting and paying all expenses of the current Escrow Agent

d) The Escrow Agent hereby agrees

(i) to maintain the Escrow Material under this Escrow Agreement in strictest confidence and secrecy

(ii) not to make use of the Escrow Materiais other than for the middotmiddot---middot performance of its obligations under this Escrow Agreement and shall not disclose or release the

same to any party othermiddot than in accordance with the terms hereof and

(iii) that the obligations imposed hereunder shall continue nob-vithstanding release of the Escrow Materials or termination of this Escrow Agreement until

middot or unless as the Escrow Materials falls within the public domain through no fault of the Escrow Agent

9 Misce1laneous

(a) Notices All notices claims certificates requests demands and other co~unications hereunder shall be in writing and shall be delivered personally or sent by facsimile transmission air courier or registered or certified mail return receipt requested addressed as follows

If to PPTI to

Protein Polymer Technologies Inc 10655 Sorrento Valley Road San Diego California 92121 Fax (619) 558-6477 Attention President

with a copy to

5

0313 2002 2006 18585586477 PPTI PAGE 0719

_

___

Piper Marbury Rudnick amp Wolfe 203 North LaSalle Str~et Chicago JL 60601

Fax (312) 630-5322 Attention John H Heuberger

If to Company to

Spine Wave Inc 12230 ElCamino Real Suite 300 San Diego California 92130 Attention David Coats Fax (858) 350-795 1

ovith a copy to

Brobeck Phleger amp Hainson LLP 12390 El Camino Real San Diego California 92130 Attention Faye H Russellgt Esq Fax (858) 720-2555

Ifto Escrow Agent to to the address specified on Exhibit A attachedhereto

or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith Any such communication shall be deemed to have been delivered (i) when delivered if delivered personally (ii) when sept (with confirmation received) if sent by facsimile transmission on a business day (iii) on the first business day after dispatch (with confirmation received) if sent by facsimile transmission on a day other than a business day (iv) on the third business day after dispatch if sent by air courier and (v) on the fifth business day after mailing if sent by registered or certified mail middot middot

(b) Severability In the event that any provision of this Escrow Agreement would be held in any jurisdiction to be invalid prohibited or unenforceable for any re35on such provision as to such jurisdiction shall be ineffecti ve1 without invalidating the remaining provisions of this Escrow Agreement or affecting the validity or enforceability ofsuch provision in any other jurisdiction Notwithstanding the foregoing ifsuch provision could be more narrowly drawn so as not to be invalid prohibited or unenforceable in such jurisdiction it shall as to such jurisdiction~ be so narrowly drawn without invalidating the remaining provisions of this Escrow Agreement or affecting the validity or enforceability of such provision in any other jurisdiction

(c) Governing Law Dispute Resolution Any controversy or claim arising out of or relating to the Escrow Agreement or the parties decision to enter into this Escrow Agreement or the breach hereof shall be settled by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association (bullAAA) and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction middot thereof Notwithstanding the forgoing to the contrary or in the arbitration rules invoked or in this

6

03132002 2005 1E585585477 PPTI PAGE 0819

Section 9(c) the parties retain the right to request a judicial authority to invoke interim measures ofprotection and such request shall not be deemed incompatible with this agreement to arbitrate or a waiver of the right to arbitrate

The arbitration shall be held in either (i) San Diego or (ii) the city in which the Companys principal place ofbusiness is located at the discretion ofthe party against whom the arbitration is sought and the arbitrator shall apply the substantive law of the State of California except that the interpretation and enforcement oftlris arbitration provision shall be govemed by the Federal Arbitration Act Tbere shall be one (1) arbitrator to be mutually agreed upon by the parties and to be selected from the Regional Panel of Distinguished Neutrals If the parties are unable to agree upon such an arbitratorwho is willing to serve within ten (10) days of receipt of a demand tomiddotarbitrate by the other party then the AAA shall appqint an arbitrator willing to serve from the stated panel or ifno such panel existsgt the parties shall within three (3) days select one of the five (5) largest international accounting firms ( excluding those prnviding services for the parties) and engage the managing partner or senior officer of its office located in the county in which the Companys principal place of business is located to designate a partner of such firm to serve as the arbitrator Failing thatgt then the AAA shall appoint an arbitrator willing to serve from the Regional Panel ofDistinguished Neutrals or if no such panel existsJ then from an appropriate AAA panel It shall be the duty of the arbitrator to set dates for preparation and hearing of any dispute and to expedite the resolution of such dispute Recognizing that the release of Escrow Materials is time critical the parties do hereby direct any arbitrator hereunder to reach a decision regarding the release of Escrow Materials (which may be a temporary or preliminary decision subject to such conditions as the arbitrator may in its sole discretion order) within 30 days following his or her engagement or appointroent

It shall be the duty of the arbitrator to set dates for preparation and hearing of any dispute and to expedite the resolution of such dispute The arbitrator shall pennit and facilitate discovery which will be conducted in accordance with the Federal Rules of Civil Procedure taking into account the needs of the parties and the desirability ofmaking discovery expediticms and cost-effective The arbitrator will set a discovery schedule with which the parties will comply and attend depositions ifrequested by either party The arbitrator will entertain such presentation of sworn testimony or evidence written briefs andor oral argument as the parties may wish to present however no testimony or exhibits will be admissible unless the adverse party was afforded an opportunity to examine such witness and to inspect and copy such exhibits during the pre-hearing discovery phase The arbitrator shall among bis other powers and authorities have the power and authority to award int_erim or preliminary reliepound The arbitrator shall not be empowered to award either party exemplary or punitive damages or any enhanced damages for willful infringement and the parties shall be deemed to have waived any right to such damages

A qualified court reporter will record and transcribe the proceedings The decision of the arbitrator will be in writing and judgment upon the award by the arbitrator may be entered into any court having jurisdiction thereof Prompt handling and disposal of the issue is important Accordingly the arbitrator is instructed to assume adequate managerial initiative and control over discovery and other aspects -of the proceeding to schedule discovery and other activities for

----~ substantially continuous work) thereby expediting the arbitration as much as is deemed

7

03132002 2005 18585585477 PPTI PAGE 0319

bull

reasonable to him but in all middotevents to effect a final award within 365 days of the ar-bitrators selection or appointment and within 20 days of the close of evidence

The proceedings shall be confidential and the arbitrator sliall issue appropriate protective orders to safeguard both parties confidential information and the Escrow Materials The fees of the arbitrator and the AAA shall be paid as designated by the arbitrator or ifhe shall not so designate they shall be split equally between the parties

(d) Binding Effect Benefits Assignment This Escrow Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted middotsuccessors and assigns Nothing contained herein shall give to any other person any benefit or any legal or equitable right remedy or claim This Escrow Agreement shall not be assignable by PPTI without the prior ivritten consent of Company which consent may be withheld in the sole discretion sf Company Notwithstanding the foregoing no consent ofCompany shall be required

middotif such assignment is in connection with the sale or transfer-of all or substantially all of the assets of PPTI or the merger or consolidation ofPPTI with or into -any other business entity Company shall be permitted to assign this Escrow Agreement upon written notice to PPTI to any party to Vhich it assigns all ofits rights under the License Agreement or sells ortransfers all or substantially all of its assets No such assignment shall relieve the assigning party of its underlying obligatfons under this Escrow Agreement

e) Entire Escrow Agreement Amendments This Escrow Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain

____ the entire understanding ofthe parties with respect to its subject matter This Escrow Agreement may be amended only by a middotwritten instrument duly executed by the parties hereto

(f) Waivers _It is further understood and agreed that no middotfailure ormiddotdelay by either party hereto in exercising any right power or privilege under this ~screw Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exerciseof any right power or privilege hereunder

(g) Counterparts This Escrow Agreement may be executed in any number of counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Escrow Agreement Each such counterpart hereof shall be deemed to be an original instrument and all such counterparts together shall constitute but one agreement

(h) Headings The article and section headings contained in this Escrow Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Escrow Agreement

[RElVIAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] -

8

0313 2002 2006 18585586477 PPTI PAGE 0719

_

___

Piper Marbury Rudnick amp Wolfe 203 North LaSalle Str~et Chicago JL 60601

Fax (312) 630-5322 Attention John H Heuberger

If to Company to

Spine Wave Inc 12230 ElCamino Real Suite 300 San Diego California 92130 Attention David Coats Fax (858) 350-795 1

ovith a copy to

Brobeck Phleger amp Hainson LLP 12390 El Camino Real San Diego California 92130 Attention Faye H Russellgt Esq Fax (858) 720-2555

Ifto Escrow Agent to to the address specified on Exhibit A attachedhereto

or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith Any such communication shall be deemed to have been delivered (i) when delivered if delivered personally (ii) when sept (with confirmation received) if sent by facsimile transmission on a business day (iii) on the first business day after dispatch (with confirmation received) if sent by facsimile transmission on a day other than a business day (iv) on the third business day after dispatch if sent by air courier and (v) on the fifth business day after mailing if sent by registered or certified mail middot middot

(b) Severability In the event that any provision of this Escrow Agreement would be held in any jurisdiction to be invalid prohibited or unenforceable for any re35on such provision as to such jurisdiction shall be ineffecti ve1 without invalidating the remaining provisions of this Escrow Agreement or affecting the validity or enforceability ofsuch provision in any other jurisdiction Notwithstanding the foregoing ifsuch provision could be more narrowly drawn so as not to be invalid prohibited or unenforceable in such jurisdiction it shall as to such jurisdiction~ be so narrowly drawn without invalidating the remaining provisions of this Escrow Agreement or affecting the validity or enforceability of such provision in any other jurisdiction

(c) Governing Law Dispute Resolution Any controversy or claim arising out of or relating to the Escrow Agreement or the parties decision to enter into this Escrow Agreement or the breach hereof shall be settled by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association (bullAAA) and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction middot thereof Notwithstanding the forgoing to the contrary or in the arbitration rules invoked or in this

6

03132002 2005 1E585585477 PPTI PAGE 0819

Section 9(c) the parties retain the right to request a judicial authority to invoke interim measures ofprotection and such request shall not be deemed incompatible with this agreement to arbitrate or a waiver of the right to arbitrate

The arbitration shall be held in either (i) San Diego or (ii) the city in which the Companys principal place ofbusiness is located at the discretion ofthe party against whom the arbitration is sought and the arbitrator shall apply the substantive law of the State of California except that the interpretation and enforcement oftlris arbitration provision shall be govemed by the Federal Arbitration Act Tbere shall be one (1) arbitrator to be mutually agreed upon by the parties and to be selected from the Regional Panel of Distinguished Neutrals If the parties are unable to agree upon such an arbitratorwho is willing to serve within ten (10) days of receipt of a demand tomiddotarbitrate by the other party then the AAA shall appqint an arbitrator willing to serve from the stated panel or ifno such panel existsgt the parties shall within three (3) days select one of the five (5) largest international accounting firms ( excluding those prnviding services for the parties) and engage the managing partner or senior officer of its office located in the county in which the Companys principal place of business is located to designate a partner of such firm to serve as the arbitrator Failing thatgt then the AAA shall appoint an arbitrator willing to serve from the Regional Panel ofDistinguished Neutrals or if no such panel existsJ then from an appropriate AAA panel It shall be the duty of the arbitrator to set dates for preparation and hearing of any dispute and to expedite the resolution of such dispute Recognizing that the release of Escrow Materials is time critical the parties do hereby direct any arbitrator hereunder to reach a decision regarding the release of Escrow Materials (which may be a temporary or preliminary decision subject to such conditions as the arbitrator may in its sole discretion order) within 30 days following his or her engagement or appointroent

It shall be the duty of the arbitrator to set dates for preparation and hearing of any dispute and to expedite the resolution of such dispute The arbitrator shall pennit and facilitate discovery which will be conducted in accordance with the Federal Rules of Civil Procedure taking into account the needs of the parties and the desirability ofmaking discovery expediticms and cost-effective The arbitrator will set a discovery schedule with which the parties will comply and attend depositions ifrequested by either party The arbitrator will entertain such presentation of sworn testimony or evidence written briefs andor oral argument as the parties may wish to present however no testimony or exhibits will be admissible unless the adverse party was afforded an opportunity to examine such witness and to inspect and copy such exhibits during the pre-hearing discovery phase The arbitrator shall among bis other powers and authorities have the power and authority to award int_erim or preliminary reliepound The arbitrator shall not be empowered to award either party exemplary or punitive damages or any enhanced damages for willful infringement and the parties shall be deemed to have waived any right to such damages

A qualified court reporter will record and transcribe the proceedings The decision of the arbitrator will be in writing and judgment upon the award by the arbitrator may be entered into any court having jurisdiction thereof Prompt handling and disposal of the issue is important Accordingly the arbitrator is instructed to assume adequate managerial initiative and control over discovery and other aspects -of the proceeding to schedule discovery and other activities for

----~ substantially continuous work) thereby expediting the arbitration as much as is deemed

7

03132002 2005 18585585477 PPTI PAGE 0319

bull

reasonable to him but in all middotevents to effect a final award within 365 days of the ar-bitrators selection or appointment and within 20 days of the close of evidence

The proceedings shall be confidential and the arbitrator sliall issue appropriate protective orders to safeguard both parties confidential information and the Escrow Materials The fees of the arbitrator and the AAA shall be paid as designated by the arbitrator or ifhe shall not so designate they shall be split equally between the parties

(d) Binding Effect Benefits Assignment This Escrow Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted middotsuccessors and assigns Nothing contained herein shall give to any other person any benefit or any legal or equitable right remedy or claim This Escrow Agreement shall not be assignable by PPTI without the prior ivritten consent of Company which consent may be withheld in the sole discretion sf Company Notwithstanding the foregoing no consent ofCompany shall be required

middotif such assignment is in connection with the sale or transfer-of all or substantially all of the assets of PPTI or the merger or consolidation ofPPTI with or into -any other business entity Company shall be permitted to assign this Escrow Agreement upon written notice to PPTI to any party to Vhich it assigns all ofits rights under the License Agreement or sells ortransfers all or substantially all of its assets No such assignment shall relieve the assigning party of its underlying obligatfons under this Escrow Agreement

e) Entire Escrow Agreement Amendments This Escrow Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain

____ the entire understanding ofthe parties with respect to its subject matter This Escrow Agreement may be amended only by a middotwritten instrument duly executed by the parties hereto

(f) Waivers _It is further understood and agreed that no middotfailure ormiddotdelay by either party hereto in exercising any right power or privilege under this ~screw Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exerciseof any right power or privilege hereunder

(g) Counterparts This Escrow Agreement may be executed in any number of counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Escrow Agreement Each such counterpart hereof shall be deemed to be an original instrument and all such counterparts together shall constitute but one agreement

(h) Headings The article and section headings contained in this Escrow Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Escrow Agreement

[RElVIAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] -

8

03132002 2005 1E585585477 PPTI PAGE 0819

Section 9(c) the parties retain the right to request a judicial authority to invoke interim measures ofprotection and such request shall not be deemed incompatible with this agreement to arbitrate or a waiver of the right to arbitrate

The arbitration shall be held in either (i) San Diego or (ii) the city in which the Companys principal place ofbusiness is located at the discretion ofthe party against whom the arbitration is sought and the arbitrator shall apply the substantive law of the State of California except that the interpretation and enforcement oftlris arbitration provision shall be govemed by the Federal Arbitration Act Tbere shall be one (1) arbitrator to be mutually agreed upon by the parties and to be selected from the Regional Panel of Distinguished Neutrals If the parties are unable to agree upon such an arbitratorwho is willing to serve within ten (10) days of receipt of a demand tomiddotarbitrate by the other party then the AAA shall appqint an arbitrator willing to serve from the stated panel or ifno such panel existsgt the parties shall within three (3) days select one of the five (5) largest international accounting firms ( excluding those prnviding services for the parties) and engage the managing partner or senior officer of its office located in the county in which the Companys principal place of business is located to designate a partner of such firm to serve as the arbitrator Failing thatgt then the AAA shall appoint an arbitrator willing to serve from the Regional Panel ofDistinguished Neutrals or if no such panel existsJ then from an appropriate AAA panel It shall be the duty of the arbitrator to set dates for preparation and hearing of any dispute and to expedite the resolution of such dispute Recognizing that the release of Escrow Materials is time critical the parties do hereby direct any arbitrator hereunder to reach a decision regarding the release of Escrow Materials (which may be a temporary or preliminary decision subject to such conditions as the arbitrator may in its sole discretion order) within 30 days following his or her engagement or appointroent

It shall be the duty of the arbitrator to set dates for preparation and hearing of any dispute and to expedite the resolution of such dispute The arbitrator shall pennit and facilitate discovery which will be conducted in accordance with the Federal Rules of Civil Procedure taking into account the needs of the parties and the desirability ofmaking discovery expediticms and cost-effective The arbitrator will set a discovery schedule with which the parties will comply and attend depositions ifrequested by either party The arbitrator will entertain such presentation of sworn testimony or evidence written briefs andor oral argument as the parties may wish to present however no testimony or exhibits will be admissible unless the adverse party was afforded an opportunity to examine such witness and to inspect and copy such exhibits during the pre-hearing discovery phase The arbitrator shall among bis other powers and authorities have the power and authority to award int_erim or preliminary reliepound The arbitrator shall not be empowered to award either party exemplary or punitive damages or any enhanced damages for willful infringement and the parties shall be deemed to have waived any right to such damages

A qualified court reporter will record and transcribe the proceedings The decision of the arbitrator will be in writing and judgment upon the award by the arbitrator may be entered into any court having jurisdiction thereof Prompt handling and disposal of the issue is important Accordingly the arbitrator is instructed to assume adequate managerial initiative and control over discovery and other aspects -of the proceeding to schedule discovery and other activities for

----~ substantially continuous work) thereby expediting the arbitration as much as is deemed

7

03132002 2005 18585585477 PPTI PAGE 0319

bull

reasonable to him but in all middotevents to effect a final award within 365 days of the ar-bitrators selection or appointment and within 20 days of the close of evidence

The proceedings shall be confidential and the arbitrator sliall issue appropriate protective orders to safeguard both parties confidential information and the Escrow Materials The fees of the arbitrator and the AAA shall be paid as designated by the arbitrator or ifhe shall not so designate they shall be split equally between the parties

(d) Binding Effect Benefits Assignment This Escrow Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted middotsuccessors and assigns Nothing contained herein shall give to any other person any benefit or any legal or equitable right remedy or claim This Escrow Agreement shall not be assignable by PPTI without the prior ivritten consent of Company which consent may be withheld in the sole discretion sf Company Notwithstanding the foregoing no consent ofCompany shall be required

middotif such assignment is in connection with the sale or transfer-of all or substantially all of the assets of PPTI or the merger or consolidation ofPPTI with or into -any other business entity Company shall be permitted to assign this Escrow Agreement upon written notice to PPTI to any party to Vhich it assigns all ofits rights under the License Agreement or sells ortransfers all or substantially all of its assets No such assignment shall relieve the assigning party of its underlying obligatfons under this Escrow Agreement

e) Entire Escrow Agreement Amendments This Escrow Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain

____ the entire understanding ofthe parties with respect to its subject matter This Escrow Agreement may be amended only by a middotwritten instrument duly executed by the parties hereto

(f) Waivers _It is further understood and agreed that no middotfailure ormiddotdelay by either party hereto in exercising any right power or privilege under this ~screw Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exerciseof any right power or privilege hereunder

(g) Counterparts This Escrow Agreement may be executed in any number of counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Escrow Agreement Each such counterpart hereof shall be deemed to be an original instrument and all such counterparts together shall constitute but one agreement

(h) Headings The article and section headings contained in this Escrow Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Escrow Agreement

[RElVIAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] -

8

03132002 2005 18585585477 PPTI PAGE 0319

bull

reasonable to him but in all middotevents to effect a final award within 365 days of the ar-bitrators selection or appointment and within 20 days of the close of evidence

The proceedings shall be confidential and the arbitrator sliall issue appropriate protective orders to safeguard both parties confidential information and the Escrow Materials The fees of the arbitrator and the AAA shall be paid as designated by the arbitrator or ifhe shall not so designate they shall be split equally between the parties

(d) Binding Effect Benefits Assignment This Escrow Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted middotsuccessors and assigns Nothing contained herein shall give to any other person any benefit or any legal or equitable right remedy or claim This Escrow Agreement shall not be assignable by PPTI without the prior ivritten consent of Company which consent may be withheld in the sole discretion sf Company Notwithstanding the foregoing no consent ofCompany shall be required

middotif such assignment is in connection with the sale or transfer-of all or substantially all of the assets of PPTI or the merger or consolidation ofPPTI with or into -any other business entity Company shall be permitted to assign this Escrow Agreement upon written notice to PPTI to any party to Vhich it assigns all ofits rights under the License Agreement or sells ortransfers all or substantially all of its assets No such assignment shall relieve the assigning party of its underlying obligatfons under this Escrow Agreement

e) Entire Escrow Agreement Amendments This Escrow Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain

____ the entire understanding ofthe parties with respect to its subject matter This Escrow Agreement may be amended only by a middotwritten instrument duly executed by the parties hereto

(f) Waivers _It is further understood and agreed that no middotfailure ormiddotdelay by either party hereto in exercising any right power or privilege under this ~screw Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exerciseof any right power or privilege hereunder

(g) Counterparts This Escrow Agreement may be executed in any number of counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Escrow Agreement Each such counterpart hereof shall be deemed to be an original instrument and all such counterparts together shall constitute but one agreement

(h) Headings The article and section headings contained in this Escrow Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Escrow Agreement

[RElVIAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] -

8

031 32002 2005 18585585477 PPTI PAGE llJ13

IN WilliESS VI-IEREOF the parties have caused this Escrow Agreement to be signed bull--- by authorized persons1 whereupon it became binding on the parties as of the date f1rst above

vvritten

SPINE VAVE INC PROTEIN POLY11ER TECHNOLOGIES INC

By -p~

J Thomas Parmeter President and CEO By

___

middot---==-

___bull

9

03132002 2005 l 85355El54 77 PFTI PAGE 1119

--bull

_

03132002 2005 13585585477 PPTI PAGE 1219

EXHIBIT A

The undersigned party hereby agrees to be the Escro-ltv Agen4 and perform all duties and fulfill all obligations of the Escrow Agent pursuant to and under tbat certain Escrow Agreement dated as of__~__ 2001 between Protein Polymer Technologies Inc and Spine Wave Inc

ESCROW AGENT

Name-~-----------Address______~----~

Telephone___________

Fax--~-----------By______________

Name--~--~-----~-Date Title

-----~------------~-------

__ ~

---

middot-- middot

EXIDBITA

03132002 2005 18585581477 PPTI PAGE 1319

---middotmiddot

middot--middotmiddot

03132002 2005 1858558E477 PPTI PAGE 1413

SCHEDULE 1

GENE CONSTRUCTION TECHNOLOGY ESCRO-W I-1ATERIALS

Gene Construction Technology Escrow Materials Clening host sell elikure eoe~tor and eKpHssfon pfrac14aampmfrac14Se aml maps and sbaelae 0pgrasag pro~dmss fer DWA synth8cis araplifaation glomag polym12atie11 aEd DNi aFHil1c~e

- bull$

Initial Deposit ~y (30) daysmiddotfollowirig delivery of notice to PPTI from Company that biomechanical standard has been met

Release to Company Upon request after completion ofSerios A ssaJ1c~_g

___ middot

SCHEDlJLE 1

03132002 2005 18585585477 PPTI PAGE 1519

1

_

middot-

---middotmiddot

03132002 2005 18585585477 FPTI PAGE 1519

SCHEDULE 2---~

BIOIVIECHANICAL STANDARD FORMULATIONS) ESCROW ltlATERlALS

Biornechanical Standard Formulation(s) Escrow M aterials Jlfooootion stFain eulture(s) with d601iption of g8M(s) aid seain(s) pcoduQtion protocolamp (fermentation purifieilio~ aaafennuletien fill end futiSfl~ Emd mftter productiofl rceeres if available er an eiample thereof) staaeiM-d epratmg procedYJlls n~q~d to impl0018lilt pHHiuctign protmols (tg solutiens matrials compona1ts and squipmimt prep0Fation) stanclaramp ~iag ~edurs and analytioal methods for con4ucting quality control let releeae analyses and staiidaid operatmg Jlree111lllFC16 and copiss of laboi~ory niaitbgGks d9ClmJegting the

i~ai=atfoB md tstieg ef KnFBW11lt~oa(s) that BHlt th biemsshan~cal standar~

Initial Deposit TlJiriy PO) eays following delivery of notice to PPTI from Company that biornechanical standard has been met

Release to Company PPTI material breach (uncured) of Supply Agreem ent

SCBEDULE 2

03132002 2005 l 85355El54 77 PFTI PAGE 1119

--bull

_

03132002 2005 13585585477 PPTI PAGE 1219

EXHIBIT A

The undersigned party hereby agrees to be the Escro-ltv Agen4 and perform all duties and fulfill all obligations of the Escrow Agent pursuant to and under tbat certain Escrow Agreement dated as of__~__ 2001 between Protein Polymer Technologies Inc and Spine Wave Inc

ESCROW AGENT

Name-~-----------Address______~----~

Telephone___________

Fax--~-----------By______________

Name--~--~-----~-Date Title

-----~------------~-------

__ ~

---

middot-- middot

EXIDBITA

03132002 2005 18585581477 PPTI PAGE 1319

---middotmiddot

middot--middotmiddot

03132002 2005 1858558E477 PPTI PAGE 1413

SCHEDULE 1

GENE CONSTRUCTION TECHNOLOGY ESCRO-W I-1ATERIALS

Gene Construction Technology Escrow Materials Clening host sell elikure eoe~tor and eKpHssfon pfrac14aampmfrac14Se aml maps and sbaelae 0pgrasag pro~dmss fer DWA synth8cis araplifaation glomag polym12atie11 aEd DNi aFHil1c~e

- bull$

Initial Deposit ~y (30) daysmiddotfollowirig delivery of notice to PPTI from Company that biomechanical standard has been met

Release to Company Upon request after completion ofSerios A ssaJ1c~_g

___ middot

SCHEDlJLE 1

03132002 2005 18585585477 PPTI PAGE 1519

1

_

middot-

---middotmiddot

03132002 2005 18585585477 FPTI PAGE 1519

SCHEDULE 2---~

BIOIVIECHANICAL STANDARD FORMULATIONS) ESCROW ltlATERlALS

Biornechanical Standard Formulation(s) Escrow M aterials Jlfooootion stFain eulture(s) with d601iption of g8M(s) aid seain(s) pcoduQtion protocolamp (fermentation purifieilio~ aaafennuletien fill end futiSfl~ Emd mftter productiofl rceeres if available er an eiample thereof) staaeiM-d epratmg procedYJlls n~q~d to impl0018lilt pHHiuctign protmols (tg solutiens matrials compona1ts and squipmimt prep0Fation) stanclaramp ~iag ~edurs and analytioal methods for con4ucting quality control let releeae analyses and staiidaid operatmg Jlree111lllFC16 and copiss of laboi~ory niaitbgGks d9ClmJegting the

i~ai=atfoB md tstieg ef KnFBW11lt~oa(s) that BHlt th biemsshan~cal standar~

Initial Deposit TlJiriy PO) eays following delivery of notice to PPTI from Company that biornechanical standard has been met

Release to Company PPTI material breach (uncured) of Supply Agreem ent

SCBEDULE 2

03132002 2005 13585585477 PPTI PAGE 1219

EXHIBIT A

The undersigned party hereby agrees to be the Escro-ltv Agen4 and perform all duties and fulfill all obligations of the Escrow Agent pursuant to and under tbat certain Escrow Agreement dated as of__~__ 2001 between Protein Polymer Technologies Inc and Spine Wave Inc

ESCROW AGENT

Name-~-----------Address______~----~

Telephone___________

Fax--~-----------By______________

Name--~--~-----~-Date Title

-----~------------~-------

__ ~

---

middot-- middot

EXIDBITA

03132002 2005 18585581477 PPTI PAGE 1319

---middotmiddot

middot--middotmiddot

03132002 2005 1858558E477 PPTI PAGE 1413

SCHEDULE 1

GENE CONSTRUCTION TECHNOLOGY ESCRO-W I-1ATERIALS

Gene Construction Technology Escrow Materials Clening host sell elikure eoe~tor and eKpHssfon pfrac14aampmfrac14Se aml maps and sbaelae 0pgrasag pro~dmss fer DWA synth8cis araplifaation glomag polym12atie11 aEd DNi aFHil1c~e

- bull$

Initial Deposit ~y (30) daysmiddotfollowirig delivery of notice to PPTI from Company that biomechanical standard has been met

Release to Company Upon request after completion ofSerios A ssaJ1c~_g

___ middot

SCHEDlJLE 1

03132002 2005 18585585477 PPTI PAGE 1519

1

_

middot-

---middotmiddot

03132002 2005 18585585477 FPTI PAGE 1519

SCHEDULE 2---~

BIOIVIECHANICAL STANDARD FORMULATIONS) ESCROW ltlATERlALS

Biornechanical Standard Formulation(s) Escrow M aterials Jlfooootion stFain eulture(s) with d601iption of g8M(s) aid seain(s) pcoduQtion protocolamp (fermentation purifieilio~ aaafennuletien fill end futiSfl~ Emd mftter productiofl rceeres if available er an eiample thereof) staaeiM-d epratmg procedYJlls n~q~d to impl0018lilt pHHiuctign protmols (tg solutiens matrials compona1ts and squipmimt prep0Fation) stanclaramp ~iag ~edurs and analytioal methods for con4ucting quality control let releeae analyses and staiidaid operatmg Jlree111lllFC16 and copiss of laboi~ory niaitbgGks d9ClmJegting the

i~ai=atfoB md tstieg ef KnFBW11lt~oa(s) that BHlt th biemsshan~cal standar~

Initial Deposit TlJiriy PO) eays following delivery of notice to PPTI from Company that biornechanical standard has been met

Release to Company PPTI material breach (uncured) of Supply Agreem ent

SCBEDULE 2

03132002 2005 18585581477 PPTI PAGE 1319

---middotmiddot

middot--middotmiddot

03132002 2005 1858558E477 PPTI PAGE 1413

SCHEDULE 1

GENE CONSTRUCTION TECHNOLOGY ESCRO-W I-1ATERIALS

Gene Construction Technology Escrow Materials Clening host sell elikure eoe~tor and eKpHssfon pfrac14aampmfrac14Se aml maps and sbaelae 0pgrasag pro~dmss fer DWA synth8cis araplifaation glomag polym12atie11 aEd DNi aFHil1c~e

- bull$

Initial Deposit ~y (30) daysmiddotfollowirig delivery of notice to PPTI from Company that biomechanical standard has been met

Release to Company Upon request after completion ofSerios A ssaJ1c~_g

___ middot

SCHEDlJLE 1

03132002 2005 18585585477 PPTI PAGE 1519

1

_

middot-

---middotmiddot

03132002 2005 18585585477 FPTI PAGE 1519

SCHEDULE 2---~

BIOIVIECHANICAL STANDARD FORMULATIONS) ESCROW ltlATERlALS

Biornechanical Standard Formulation(s) Escrow M aterials Jlfooootion stFain eulture(s) with d601iption of g8M(s) aid seain(s) pcoduQtion protocolamp (fermentation purifieilio~ aaafennuletien fill end futiSfl~ Emd mftter productiofl rceeres if available er an eiample thereof) staaeiM-d epratmg procedYJlls n~q~d to impl0018lilt pHHiuctign protmols (tg solutiens matrials compona1ts and squipmimt prep0Fation) stanclaramp ~iag ~edurs and analytioal methods for con4ucting quality control let releeae analyses and staiidaid operatmg Jlree111lllFC16 and copiss of laboi~ory niaitbgGks d9ClmJegting the

i~ai=atfoB md tstieg ef KnFBW11lt~oa(s) that BHlt th biemsshan~cal standar~

Initial Deposit TlJiriy PO) eays following delivery of notice to PPTI from Company that biornechanical standard has been met

Release to Company PPTI material breach (uncured) of Supply Agreem ent

SCBEDULE 2

03132002 2005 1858558E477 PPTI PAGE 1413

SCHEDULE 1

GENE CONSTRUCTION TECHNOLOGY ESCRO-W I-1ATERIALS

Gene Construction Technology Escrow Materials Clening host sell elikure eoe~tor and eKpHssfon pfrac14aampmfrac14Se aml maps and sbaelae 0pgrasag pro~dmss fer DWA synth8cis araplifaation glomag polym12atie11 aEd DNi aFHil1c~e

- bull$

Initial Deposit ~y (30) daysmiddotfollowirig delivery of notice to PPTI from Company that biomechanical standard has been met

Release to Company Upon request after completion ofSerios A ssaJ1c~_g

___ middot

SCHEDlJLE 1

03132002 2005 18585585477 PPTI PAGE 1519

1

_

middot-

---middotmiddot

03132002 2005 18585585477 FPTI PAGE 1519

SCHEDULE 2---~

BIOIVIECHANICAL STANDARD FORMULATIONS) ESCROW ltlATERlALS

Biornechanical Standard Formulation(s) Escrow M aterials Jlfooootion stFain eulture(s) with d601iption of g8M(s) aid seain(s) pcoduQtion protocolamp (fermentation purifieilio~ aaafennuletien fill end futiSfl~ Emd mftter productiofl rceeres if available er an eiample thereof) staaeiM-d epratmg procedYJlls n~q~d to impl0018lilt pHHiuctign protmols (tg solutiens matrials compona1ts and squipmimt prep0Fation) stanclaramp ~iag ~edurs and analytioal methods for con4ucting quality control let releeae analyses and staiidaid operatmg Jlree111lllFC16 and copiss of laboi~ory niaitbgGks d9ClmJegting the

i~ai=atfoB md tstieg ef KnFBW11lt~oa(s) that BHlt th biemsshan~cal standar~

Initial Deposit TlJiriy PO) eays following delivery of notice to PPTI from Company that biornechanical standard has been met

Release to Company PPTI material breach (uncured) of Supply Agreem ent

SCBEDULE 2

03132002 2005 18585585477 PPTI PAGE 1519

1

_

middot-

---middotmiddot

03132002 2005 18585585477 FPTI PAGE 1519

SCHEDULE 2---~

BIOIVIECHANICAL STANDARD FORMULATIONS) ESCROW ltlATERlALS

Biornechanical Standard Formulation(s) Escrow M aterials Jlfooootion stFain eulture(s) with d601iption of g8M(s) aid seain(s) pcoduQtion protocolamp (fermentation purifieilio~ aaafennuletien fill end futiSfl~ Emd mftter productiofl rceeres if available er an eiample thereof) staaeiM-d epratmg procedYJlls n~q~d to impl0018lilt pHHiuctign protmols (tg solutiens matrials compona1ts and squipmimt prep0Fation) stanclaramp ~iag ~edurs and analytioal methods for con4ucting quality control let releeae analyses and staiidaid operatmg Jlree111lllFC16 and copiss of laboi~ory niaitbgGks d9ClmJegting the

i~ai=atfoB md tstieg ef KnFBW11lt~oa(s) that BHlt th biemsshan~cal standar~

Initial Deposit TlJiriy PO) eays following delivery of notice to PPTI from Company that biornechanical standard has been met

Release to Company PPTI material breach (uncured) of Supply Agreem ent

SCBEDULE 2

03132002 2005 18585585477 FPTI PAGE 1519

SCHEDULE 2---~

BIOIVIECHANICAL STANDARD FORMULATIONS) ESCROW ltlATERlALS

Biornechanical Standard Formulation(s) Escrow M aterials Jlfooootion stFain eulture(s) with d601iption of g8M(s) aid seain(s) pcoduQtion protocolamp (fermentation purifieilio~ aaafennuletien fill end futiSfl~ Emd mftter productiofl rceeres if available er an eiample thereof) staaeiM-d epratmg procedYJlls n~q~d to impl0018lilt pHHiuctign protmols (tg solutiens matrials compona1ts and squipmimt prep0Fation) stanclaramp ~iag ~edurs and analytioal methods for con4ucting quality control let releeae analyses and staiidaid operatmg Jlree111lllFC16 and copiss of laboi~ory niaitbgGks d9ClmJegting the

i~ai=atfoB md tstieg ef KnFBW11lt~oa(s) that BHlt th biemsshan~cal standar~

Initial Deposit TlJiriy PO) eays following delivery of notice to PPTI from Company that biornechanical standard has been met

Release to Company PPTI material breach (uncured) of Supply Agreem ent

SCBEDULE 2

03132002 2005 185855854 77 PPTI PAGE 1719

i

03132002 2006 18585586477 PPTI PAGE 1819

middotmiddot SCHEDULE 3

COMMERCIAL PRODUCTION ESCROW MATERIALS

Commercial Production Escrow Materials Prod-uotioH strain oulmre(s) with d16aripfiign gf g~(s) 4kllQ siil~(s) mast8f prndustion ncor~

(feffflefitebon purifioation Etpoundd forn=Pcllation fill me fiifisb) StaGdare operatieg procdmes ~uir~a to impl8frac14ll8Ilt produGtion rssords (~g soltradeiias materials oompoaents andmiddoteqa4pmtmt-PF~ililation) middot

Initial Deposit ~ following delivery ofnotice to PPTI from Company that IDE (or for updates manufacruring supplement or marketing approval submission) has received regulatory ~pproval

Release to Companv Release on a product by product basis upon notice of (1) commercial manufacturing of Product by persons other than PPTI following PPTI7s election not to commercially manufacture Product under its commercial manufacturing rights (2) PPTI material breach (uncured) of any commercial supply agreement or (3) PPTI material breach (uncured) of Supply Agreement

SCREDULEJ

03132002 2006 18585586477 PPTI PAGE 1819

middotmiddot SCHEDULE 3

COMMERCIAL PRODUCTION ESCROW MATERIALS

Commercial Production Escrow Materials Prod-uotioH strain oulmre(s) with d16aripfiign gf g~(s) 4kllQ siil~(s) mast8f prndustion ncor~

(feffflefitebon purifioation Etpoundd forn=Pcllation fill me fiifisb) StaGdare operatieg procdmes ~uir~a to impl8frac14ll8Ilt produGtion rssords (~g soltradeiias materials oompoaents andmiddoteqa4pmtmt-PF~ililation) middot

Initial Deposit ~ following delivery ofnotice to PPTI from Company that IDE (or for updates manufacruring supplement or marketing approval submission) has received regulatory ~pproval

Release to Companv Release on a product by product basis upon notice of (1) commercial manufacturing of Product by persons other than PPTI following PPTI7s election not to commercially manufacture Product under its commercial manufacturing rights (2) PPTI material breach (uncured) of any commercial supply agreement or (3) PPTI material breach (uncured) of Supply Agreement

SCREDULEJ

03132002 2005 185855864 77 PPTI PAGE 1319

middot SCHEDULE 4

PROTEIN POLYlVlER DESIGN AND SUPPLY ESCROV lVlATEIUALS

Protein Polymer Design and Supply Escrow Materials middot Monomer strain eulnaes polmer production strain swhrrs gea~ seqyacs 3r-1g plasmid maps production pi=otoeels (femleEtation pllflfioation) standefEI opefating promidures or other prneedirres requiroti ~e H11tJ lement pred-uetion protooois (eg solutions materials eompenents and eqaiprnsnt prep0if$on) aed standard op8rating procedures 0pound otaef proeedures and inalyticaI m8tl-aods for coad-ucting q~ality control lot reJease analyses

Initial Deposit +hirty (~G) days following delivery of notice to PPTI from Company that biomechanical middot standard has been met_

Release to Company Release on a relevant culture-by-culture and protein specific basis upon (1) Company notice to PPTI ofinitiation of intemal Design Senrices effort ( as provided in the Supply Agreement) specifyingmiddot needed rpaterials or (2) notice of Design Services by persons other than PPTI following PPTIs election not to supply Design Services under its Design Services rights under the Supply Agreement_

Release of all Protein Polymer Design and Supply Escrow Materials if PPTI material breach (uncured) of Supply Agreement

SCHEDULE4

• 18-03326-E
• Response 18-03326-E
• Exhibit 1040 18-03326-E