IMMUCELL CORP /DE/ (Form: 10-Q, Received: 08/16/2010 12:59:26)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

001-12934

(Commission file number)

ImmuCell Corporation

(Exact name of registrant as specified in its charter)


Delaware		01-0382980
(State of incorporation)		(I.R.S. Employer Identification No.)

56 Evergreen Drive, Portland, ME		04103
(Address of principal executive office)		(Zip Code)

(207) 878-2770

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of August 13, 2010, the registrant had 2,970,652 shares of Common Stock, par value $0.10 per share, outstanding.

ImmuCell Corporation

INDEX TO FORM 10-Q

June 30, 2010


			Page
PART I: FINANCIAL INFORMATION

	ITEM 1.	FINANCIAL STATEMENTS

		Balance Sheets at December 31, 2009 and June 30, 2010	2

		Statements of Operations for the three-month and six-month periods ended June 30, 2009 and 2010	3

		Statements of Stockholders’ Equity for the six-month periods ended June 30, 2009 and 2010	4

		Statements of Cash Flows for the six-month periods ended June 30, 2009 and 2010	5

		Notes to Financial Statements	6-9

	ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	10-15

	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	15

	ITEM 4.	CONTROLS AND PROCEDURES	15

PART II: OTHER INFORMATION

	ITEMS 1 THROUGH 6		16-20

SIGNATURE			21

ImmuCell Corporation

PART 1. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

BALANCE SHEETS


	December 31, 2009			(Unaudited) June 30, 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	975,490		$	1,744,749
Short-term investments		3,610,000			2,472,000
Trade accounts receivable, net of allowance for doubtful accounts of $10,000 and $11,000 at December 31, 2009 and June 30, 2010, respectively		390,242			512,037
Income taxes receivable		1,248			1,248
Other receivables		24,022			44,101
Inventories		1,087,391			1,354,684
Prepaid expenses		179,828			137,863
Current portion of deferred tax asset		38,507			23,269

Total current assets		6,306,728			6,289,951

PROPERTY, PLANT AND EQUIPMENT, at cost:
Laboratory and manufacturing equipment		2,820,425			2,860,515
Building and improvements		2,537,602			2,546,705
Office furniture and equipment		190,799			223,588
Land		50,000			50,000

		5,598,826			5,680,808

Less – accumulated depreciation		2,619,828			2,821,678


Net property, plant and equipment		2,978,998			2,859,130
LONG-TERM PORTION OF DEFERRED TAX ASSET		698,085			755,220
OTHER ASSETS		900			725


TOTAL ASSETS	$	9,984,711		$	9,905,026

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accrued expenses	$	222,885		$	204,534
Accounts payable		139,885			123,865


Total current liabilities		362,770			328,399

STOCKHOLDERS’ EQUITY:
Common stock, Par value-$0.10 per share
Authorized-8,000,000 shares, Issued-3,261,148 shares at December 31, 2009 and June 30, 2010		326,115			326,115
Capital in excess of par value		9,751,442			9,765,833
Accumulated surplus		179,879			120,174
Treasury stock at cost – 290,496 shares at December 31, 2009 and June 30, 2010, respectively		(635,495	)		(635,495	)


Total stockholders’ equity		9,621,941			9,576,627

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	9,984,711		$	9,905,026

The accompanying notes are an integral part of these financial statements.

ImmuCell Corporation

STATEMENTS OF OPERATIONS FOR THE

THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2009 AND 2010

(Unaudited)


	Three-Month Periods Ended June 30,							Six-Month Periods Ended June 30,
		2009			2010			2009			2010
REVENUES :
Product sales		$	1,000,629		$	1,077,672		$	2,460,907			2,389,419
Royalty income			718			1,538			1,927			1,974


Total revenues			1,001,347			1,079,210			2,462,834			2,391,393

COSTS AND EXPENSES :
Product costs			512,803			459,055			1,252,523			1,031,645
Product development expenses			488,954			333,320			921,439			738,782
General and administrative expenses			231,594			224,569			465,249			463,495
Sales and marketing expenses			83,776			108,358			211,875			277,526


Total costs and expenses			1,317,127			1,125,302			2,851,086			2,511,448


Net operating loss			(315,780	)		(46,092	)		(388,252	)		(120,055	)

Interest income			32,432			7,722			67,846			16,441
Other income			903			1,648			1,496			2,086


Interest and other income			33,335			9,370			69,342			18,527


LOSS BEFORE INCOME TAXES			(282,445	)		(36,722	)		(318,910	)		(101,528	)

INCOME TAX BENEFIT			(134,625	)		(30,283	)		(136,461	)		(41,823	)


NET LOSS		$	(147,820	)	$	(6,439	)	$	(182,449	)	$	(59,705	)


NET LOSS PER COMMON SHARE :
Basic		$	(0.05	)	$	(0.00	)	$	(0.06	)	$	(0.02	)
Diluted		$	(0.05	)	$	(0.00	)	$	(0.06	)	$	(0.02	)


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			2,970,652			2,970,652			2,946,718			2,970,652
Diluted			2,970,652			2,970,652			2,946,718			2,970,652

The accompanying notes are an integral part of these financial statements.

ImmuCell Corporation

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2009


	Common Stock $0.10 Par Value			Capital in Excess of Par Value			Accumulated Surplus			Treasury Stock					Total Stockholders’ Equity
	Shares	Amount		Capital in Excess of Par Value			Accumulated Surplus			Shares		Amount			Total Stockholders’ Equity
BALANCE,
December 31, 2008	3,261,148	$	326,115	$	9,722,967		$	396,372		366,496		$	(801,753	)	$	9,643,701

Net loss	—		—		—			(182,449	)	—			—			(182,449	)

Exercise of stock options, net	—		—		(66,508	)		—		(76,000	)		166,258			99,750

Stock-based compensation	—		—		54,664			—		—			—			54,664

Tax benefits related to stock options	—		—		921			—		—			—			921


BALANCE,
June 30, 2009	3,261,148	$	326,115	$	9,712,044		$	213,923		290,496		$	(635,495	)	$	9,616,587

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2010


	Common Stock $0.10 Par Value			Capital in Excess of Par Value		Accumulated Surplus			Treasury Stock				Total Stockholders’ Equity
	Shares	Amount		Capital in Excess of Par Value		Accumulated Surplus			Shares	Amount			Total Stockholders’ Equity
BALANCE,
December 31, 2009	3,261,148	$	326,115	$	9,751,442	$	179,879		290,496	$	(635,495	)	$	9,621,941

Net loss	—		—		—		(59,705	)	—		—			(59,705	)

Stock-based compensation	—		—		14,391		—		—		—			14,391


BALANCE,
June 30, 2010	3,261,148	$	326,115	$	9,765,833	$	120,174		290,496	$	(635,495	)	$	9,576,627

The accompanying notes are an integral part of these financial statements.

ImmuCell Corporation

STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS

ENDED JUNE 30, 2009 AND 2010

(Unaudited)


	Six-Month Periods Ended June 30,
	2009			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(182,449	)	$	(59,705	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation		189,911			210,945
Amortization		15,072			—
Deferred income taxes		(137,477	)		(41,897	)
Stock-based compensation		54,664			14,391
Loss on disposal of fixed assets		29,861			—
Changes in:
Receivables		17,842			(141,874	)
Inventories		(91,078	)		(267,293	)
Prepaid expenses and other assets		(27,659	)		42,140
Accrued expenses		(189,329	)		(18,351	)
Accounts payable		87,698			(12,922	)

Net cash used for operating activities		(232,944	)		(274,566	)

CASH FLOWS FROM INVESTING ACTIVITES :
Purchase of property, plant and equipment		(105,765	)		(94,175	)
Maturities of short-term investments		2,502,103			2,371,000
Purchases of short-term investments		(2,371,000	)		(1,233,000	)

Net cash provided by investing activities		25,338			1,043,825

CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefits related to stock options		921			—
Proceeds from exercise of stock options, net		99,750			—

Net cash provided by financing activities		100,671			—


NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(106,935	)		769,259

BEGINNING CASH AND CASH EQUIVALENTS		1,199,929			975,490


ENDING CASH AND CASH EQUIVALENTS	$	1,092,994		$	1,744,749


INCOME TAXES PAID	$	(90	)	$	(74	)


NON-CASH INVESTING AND FINANCING ACTIVITIES: Change in capital expenditures included in accounts payable	$	7,313		$	(3,098	)

The accompanying notes are an integral part of these financial statements.

ImmuCell Corporation

NOTES TO FINANCIAL STATEMENTS

June 30, 2010

1. BASIS OF PRESENTATION

We have prepared the accompanying financial statements without audit and have reflected all adjustments, all of which are of a normal recurring nature, that are, in our opinion, necessary in order to make the financial statements not misleading. We follow accounting standards set by the Financial Accounting Standards Board (FASB). The FASB sets generally accepted accounting principles (GAAP) that we follow to ensure we consistently report our financial condition, results of operations, earnings per share and cash flows. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification ™ (Codification). The FASB finalized the Codification effective for periods ending on or after September 15, 2009. Certain information and footnote disclosures normally included in the annual financial statements have been condensed or omitted. Accordingly, we believe that although the disclosures are adequate to make the information presented not misleading, these financial statements should be read in conjunction with the financial statements for the year ended December 31, 2009 and the notes thereto, contained in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

2. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

We consider all highly liquid investment instruments that mature within three months of their purchase dates to be cash equivalents. Short-term investments are classified as held to maturity and are comprised of certificates of deposit that mature in more than three months from their purchase and not more than twelve months from the balance sheet date and are held at different financial institutions that are insured by the Federal Deposit Insurance Corporation (FDIC). Our short-term investments held at such financial institutions are within FDIC insurance limits. The Emergency Economic Stabilization Act of 2008 increased these insurance limits from $100,000 to $250,000 per institution per depositor for the period from October 3, 2008 to December 31, 2009. During the second quarter of 2009, this period of increased insurance limits was extended through December 31, 2013. In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act extended this $250,000 limit indefinitely.

Cash, cash equivalents and short-term investments consist of the following (in thousands):


	December 31, 2009		June 30, 2010		Increase (Decrease)
Cash and cash equivalents	$	975	$	1,745	$	770
Short-term investments		3,610		2,472		(1,138	)

	$	4,585	$	4,217	$	(368	)

3. INVENTORIES

Inventories consist of the following (in thousands):


	December 31, 2009		June 30, 2010		Increase (Decrease)
Raw materials	$	176	$	216	$	40
Work-in-process		630		609		(21	)
Finished goods		281		530		249

	$	1,087	$	1,355	$	268

ImmuCell Corporation

NOTES TO FINANCIAL STATEMENTS (Continued)

June 30, 2010

4. INCOME TAXES

We account for income taxes in accordance with Codification Topic 740, Income Taxes . This Topic requires that we recognize a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences and carryforwards to the extent they are realizable. We believe it is more likely than not that the deferred tax assets will be realized through future tax effects of temporary differences between book income and taxable income. Accordingly, we have not established a valuation allowance for the deferred tax assets. Effective January 1, 2007, we implemented the provisions of Codification Topic 740-10, which clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax provision must meet before being recognized in the financial statements. Adoption of this Topic did not have an impact on our financial condition, results of operations, earnings per share or cash flows. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. In addition, we are subject to periodic audits and examinations by the IRS and other taxing authorities. Although we believe that our estimates are reasonable, actual results could differ from these estimates.

5. NET LOSS PER COMMON SHARE

In accordance with Codification Topic 260-10, Earnings Per Share , the net loss per common share has been computed by dividing the net loss by the weighted average number of common shares outstanding during the period, without giving consideration to outstanding stock options because the impact would be anti-dilutive. Outstanding stock options not included in the calculation aggregated approximately 386,000 and 273,000 during the three-month and the six-month periods ended June 30, 2009 and 2010, respectively.

6. EMPLOYEE STOCK-BASED COMPENSATION

We account for stock-based compensation in accordance with Codification Topic 718 , Compensation-Stock Compensation , which generally requires us to recognize non-cash compensation expense for stock-based payments using the fair-value-based method. Accordingly, we recorded compensation expense pertaining to stock-based compensation of approximately $23,000 and $0 during the three-month periods ended June 30, 2009 and 2010, respectively, and $55,000 and $14,000 during the six-month periods ended June 30, 2009 and 2010, respectively. Half of this expense is allocated to general and administrative expenses and half to product development expenses.

The exercise price of the 273,000 stock options outstanding as of June 30, 2010 ranged from $1.70 to $7.00 per share. The fair value of each stock option grant has been estimated on the date of grant using the Black-Scholes option pricing model, as detailed in Note 5(b) to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2009. As of June 30, 2010, total unrecognized compensation costs related to non-vested stock-based compensation arrangements aggregated approximately $111,000. That cost is expected to be recognized through the first quarter of 2013, which represents the remaining vesting period of the outstanding, non-vested stock options.

7. COMMON STOCK

In September 1995, our Board of Directors adopted a Common Stock Rights Plan, the terms of which were set forth in a Rights Agreement with American Stock Transfer & Trust Co., as Rights Agent. Pursuant to the Rights Agreement, we issued certain rights to all holders of our common stock. Under the Rights Agreement, the rights expire on the earlier to occur of the Redemption Date (as defined in the Rights Agreement) or the Final Expiration Date (originally defined to be September 19, 2005). On June 8, 2005, our Board voted to authorize an amendment of the Rights Agreement to extend the Final Expiration Date by an additional three years, to September 19, 2008. On June 6, 2008 our Board voted to authorize an amendment of the Rights Agreement to extend the Final Expiration Date by an additional three years, to September 19, 2011 and to increase the ownership threshold for determining “Acquiring Person” status from 15% to 18%. As of June 30, 2008, we entered into an amendment to the Rights Agreement with the Rights Agent reflecting such extension and threshold increase. No other changes were made to the terms of the rights or the Rights Agreement.

ImmuCell Corporation

NOTES TO FINANCIAL STATEMENTS (Continued)

June 30, 2010

8. SEGMENT AND SIGNIFICANT CUSTOMER INFORMATION

Pursuant to Codification Topic 280, Segment Reporting , we operate in one reportable business segment, that being the development, acquisition, manufacture and sales of products that improve the health and productivity of cows for the dairy and beef industries. Almost all of the Company’s internally funded product development expenses are in support of such products. Our primary customers for the majority (69% and 74% for the three-month periods ended June 30, 2009 and 2010, respectively) of our product sales are in the United States dairy and beef industries. Sales to non-U.S. customers who are in the dairy and beef industries aggregated 17% and 13% of product sales for the three-month periods ended June 30, 2009 and 2010, respectively. Our primary customers for the majority (73% and 82% for the six-month periods ended June 30, 2009 and 2010, respectively) of our product sales are in the United States dairy and beef industries. Sales to non-U.S. customers who are in the dairy and beef industries aggregated 21% and 13% of product sales for the six-month periods ended June 30, 2009 and 2010, respectively.

Sales to significant customers, as a percentage of total product sales, are detailed in the following table:


	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
	2009		2010		2009		2010
Animal Health International, Inc.	20	%	26	%	25	%	22	%
Lextron, Inc./Vet Pharm, Inc.	17	%	11	%	16	%	14	%
MWI Veterinary Supply Co.	10	%	12	%	*		12	%
TCS Biosciences, Ltd.	13	%	13	%	*		*

Accounts receivable due from significant customers, as a percentage of total trade accounts receivable, are detailed in the following table:


	December 31, 2009		June 30, 2010
Animal Health International, Inc.	44	%	26	%
MWI Veterinary Supply Co.	10	%	13	%
TCS Biosciences, Ltd.	*		26	%

*	Amount is less than 10%.

9. RELATED PARTY TRANSACTIONS

Dr. David S. Tomsche (a member of our Board of Directors) is a controlling owner of Stearns Veterinary Outlet, Inc., a domestic distributor of ImmuCell products ( First Defense ^® , Wipe Out ^® Dairy Wipes , and CMT ), and of J-t Enterprises of Melrose, Inc., an exporter. His affiliated companies purchased approximately $127,000 and $142,000 of products from ImmuCell during the six-month periods ended June 30, 2009 and 2010, respectively, on terms consistent with those offered to other distributors of similar status. Our accounts receivable (subject to standard and customary payment terms) due from these affiliated companies aggregated approximately $22,000 and less than $1,000 as of December 31, 2009 and June 30, 2010, respectively. Additionally, we spent less than $5,000 on marketing support for affiliated companies controlled by Dr. Tomsche during both of the six-month periods ended June 30, 2009 and 2010.

AlcheraBio LLC is a wholly-owned subsidiary of Argenta of New Zealand. Dr. Linda Rhodes (a member of our Board of Directors) is co-founder of AlcheraBio and currently serves as its Vice President, Clinical Affairs. During the six-month periods ended June 30, 2009 and 2010, we made payments of less than $10,000 to Argenta for consulting services.

ImmuCell Corporation

NOTES TO FINANCIAL STATEMENTS (Continued)

June 30, 2010

10. SUBSEQUENT EVENTS

We have adopted the disclosure provisions of Codification Topic, 855-10-50-1, which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Entities are required to disclose the date through which subsequent events were evaluated as well as the rationale for why that date was selected. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. Codification Topic 855-10-50-1 requires additional disclosures only, and therefore did not have an impact on our financial condition, results of operations, earnings per share or cash flows. Public entities must evaluate subsequent events through the date that financial statements are issued. Accordingly, we have evaluated subsequent events through August 13, 2010, the date we have issued this Quarterly Report on Form 10-Q.

During July 2010, we entered into a development and long-term supply agreement with Lonza Sales, Ltd of Basel, Switzerland covering the exclusive manufacture of pharmaceutical-grade Nisin by Lonza for us. In connection therewith, we committed almost $550,000 to Lonza to generate the data required for a first submission of the CMC Technical Section. This work is expected to be completed during the second half of 2010. Subject to obtaining acceptable results from this work, we may choose to make additional and larger financial commitments to Lonza on a stage-by-stage basis to complete the manufacturing process development.

During August 2010, we agreed to terms of certain credit facilities with TD Bank, N.A. aggregating up to approximately $2,100,000, which are secured by substantially all of our assets. These credit facilities are comprised of a ten-year mortgage loan of $1,000,000, a $600,000 five-year loan and a $500,000 line of credit, which is renewable annually. Proceeds from the $1,000,000 mortgage were received in August 2010. Proceeds from the $600,000 loan are expected in February 2011 and the $500,000 line of credit is available as needed.

ImmuCell Corporation

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2010

Product Sales

Product sales increased by approximately 8%, or $77,000, to $1,078,000 during the three-month period ended June 30, 2010 in comparison to $1,001,000 during the same period in 2009. Product sales decreased by approximately 3%, or $71,000, to $2,389,000 during the six-month period ended June 30, 2010 in comparison to $2,461,000 during the same period in 2009. During the first six months of 2010, domestic sales increased by 8%, or $150,000, but foreign sales decreased by 33%, or $221,000, in comparison to the same period in 2009. We had no backlog of orders as of June 30, 2010. As of June 30, 2009, we had a backlog of orders aggregating approximately $287,000. If this backlog of orders had shipped prior to July 1, 2009, our product sales during the second quarter of 2010 would have been down by approximately 16%, or $210,000, and our product sales during the first six months of 2010 would have been down by 13%, or $358,000.

We appreciate the volume of business that we have maintained during these difficult economic times when many of our customers are taking cost-cutting measures. Even in this challenging market with low milk prices and high feed costs, our lead product, First Defense ^® , continues to benefit from wide acceptance as an effective tool to prevent bovine enteritis (scours) in newborn calves. We have sold over 9,000,000 doses of First Defense ^® since receiving USDA approval of this product in 1991. Sales are normally seasonal, with higher sales expected during the first and fourth quarters and lower sales expected during the second and third quarters. During 2006, certain regional organic certifying agencies determined that the ingredients in First Defense ^® are in compliance with the National Organic Program (NOP) and may be considered for use on organic farms. First Defense ^® should be considered a preventative vaccine as described in USDA-NOP regulations for organic producer consideration when establishing management plans. Sales of First Defense ^® decreased by 2% during the six-month period ended June 30, 2010 in comparison to the same period in 2009. Domestic sales of First Defense ^® increased by 9%, but this increase was more than offset by a decline in foreign sales of First Defense ^® . Sales of Wipe Out ^® Dairy Wipes increased by 9% during the six-month period ended June 30, 2010 in comparison to the same period in 2009. Despite this increase, domestic sales of this premium product continue to be under competitive pressure from less expensive products, alternative teat sanitizing methods and the continuing economic difficulties faced by the U.S. dairy industry.

Gross Margin

Changes in the gross margin on product sales are summarized in the following table for the respective periods (in thousands, except for percentages):


	Three-Month Periods Ended June 30,						Increase
	2009			2010			Amount			%
Gross margin	$	488		$	619		$	131		27	%
Percent of product sales		49	%		57	%		8	%	16	%

	Six-Month Periods Ended June 30,						Increase
	2009			2010			Amount			%
Gross margin	$	1,208		$	1,358		$	150		12	%
Percent of product sales		49	%		57	%		8	%	16	%

	Twelve-Month Periods Ended June 30,						Increase
	2009			2010			Amount			%
Gross margin	$	2,081		$	2,547		$	466		22	%
Percent of product sales		45	%		57	%		12	%	27	%

ImmuCell Corporation

The gross margin as a percentage of product sales was 57% and 49% during the three-month periods ended June 30, 2010 and 2009, respectively. The gross margin as a percentage of product sales was 57% and 49% during the six-month periods ended June 30, 2010 and 2009, respectively. The gross margin as a percentage of product sales was 57% and 45% during the twelve-month periods ended June 30, 2010 and 2009, respectively. This compares to gross margin percentages of 53%, 45% and 52% for the years ended December 31, 2009, 2008 and 2007, respectively. While our gross margin as a percentage of product sales dropped during 2008, we have experienced improvement since then. Our current annual objective for gross margin percentage is approximately 50%. We expect some fluctuations in gross margin percentages from quarter to quarter. We believe that a number of factors can cause our costs to be variable. Biological yields from the raw material used in the production of First Defense ^® do fluctuate over time. Like most manufacturers in the U.S., we have been experiencing increases in the cost of raw materials that we purchase. Product mix also affects gross margin in that we earn a higher gross margin on First Defense ^® and a lower gross margin on Wipe Out ^® Dairy Wipes . We had held our selling prices without significant increases for approximately the seven-year period ended December 31, 2007, believing that we could benefit more from higher unit sales volume than through a higher average selling price per unit. During the first quarter of 2008, we did implement a modest increase to the selling price of First Defense ^® and have held that selling price without increase since then.

Product Development

Product development expenses decreased by approximately 32%, or $156,000, to $333,000 during the three-month period ended June 30, 2010 in comparison to the same period in 2009. Product development expenses aggregated 31% and 49% of product sales during the three-month periods ended June 30, 2010 and 2009, respectively. Product development expenses decreased by approximately 20%, or $183,000, to $739,000 during the six-month period ended June 30, 2010 in comparison to the same period in 2009. Product development expenses aggregated 31% and 37% of product sales during the six-month periods ended June 30, 2010 and 2009, respectively. The product development expenses principally reflect the costs of funding the development of Mast Out ^® and to a lesser extent product line extensions to First Defense ^® . During 2009, we were funding the pivotal effectiveness study of Mast Out ^® , which was completed in September 2009.

In April 2000, we acquired an exclusive license from Nutrition 21, Inc. to develop and market Nisin-based products for animal health applications, which allowed us to initiate the development of Mast Out ^® . In November 2004, we paid Nutrition 21 approximately $965,000 to buy out this royalty and milestone-based license to Nisin, thereby acquiring control of the animal health applications of Nisin. Nisin is a well characterized substance, having been used in food preservation applications for over 50 years. Food-grade Nisin, however, cannot be used in pharmaceutical applications because of its low purity. Our Nisin technology includes methods to achieve pharmaceutical-grade purity. Nisin, the same active ingredient contained in Wipe Out ^® Dairy Wipes , is an antibacterial peptide. Nisin is known to have activity against most gram positive and some gram negative bacteria. Mast Out ^® , an intramammary infusion product containing Nisin, is being developed as an alternative to traditional antibiotics used in the treatment of mastitis in lactating dairy cows.

Traditional antibiotic products currently on the market for use in the treatment of mastitis are sold subject to a regulatory requirement to discard milk from treated cows during the course of and for a period following antibiotic treatment (the milk discard requirement). Currently, mastitis treatment is generally limited to only clinical cases - those cases where cows are producing abnormal milk - since that milk already is unsuitable for commercial sale. Because milk from cows with subclinical mastitis (those with infected udders, but still producing normal milk) can be sold, dairy producers generally do not treat subclinical mastitis - as doing so would give rise to the milk discard requirement and a resulting loss in revenue to the dairy producer. The safety profile of Nisin may allow for the use of Mast Out ^® in the U.S. without a milk discard requirement, which would be a significant competitive advantage. We are not aware of any other intramammary mastitis treatment product that has such a “zero discard” claim. Without the milk discard requirement, we believe Mast Out ^® could expand the subclinical mastitis treatment market niche. Regulations in the European Union will likely require that Mast Out ^® be sold subject to a milk discard requirement in that territory, although the duration of the milk discard requirement may be shorter than the discard requirement for competitive products on the market. We have not evaluated the milk discard regulations for new products in other foreign territories.

In January 2004, we achieved positive results from an experimental field trial of Mast Out ^® in 139 cows with subclinical mastitis. The placebo-controlled, blinded, multi-farm study was conducted in collaboration with researchers at Cornell University. Mast Out ^® demonstrated a statistically significant overall cure rate in two separate dosage groups in comparison to the placebo group. In December 2004, we entered into a product development and marketing agreement with Pfizer Animal Health, a division of Pfizer, Inc., covering Mast Out ^® . Under that agreement (as amended and supplemented and later terminated), we received $2,375,000 in payments from Pfizer. In July 2007, we received notice from Pfizer that it had elected to terminate the product development and marketing agreement. Soon thereafter, Pfizer returned to us all rights, data, information, files, regulatory filings, materials and stocks of Nisin and Nisin producing cultures relating to the

ImmuCell Corporation

development of Mast Out ^® . Our decision to continue product development efforts reflects our belief that Mast Out ^® is approvable by the FDA without a milk discard requirement for sale in the U.S. We believe that such a product has significant sales potential in the U.S. dairy market

A significant risk to the market success of Mast Out ^® is that the use of Mast Out ^® may require specific treatment restrictions at the herd level, when used to treat subclinical mastitis with no milk discard. Due to its antibacterial nature, Nisin in bulk tank milk could interfere with the manufacture of certain (but not all) cultured milk products, such as some kinds of cheese and yogurt, if a high enough percentage of animals from a herd is treated at any one time. We are evaluating potential strategies to minimize this risk. Milk that is sold exclusively for fluid milk products would not be subject to this restriction. We believe that the benefits of using Mast Out ^® would outweigh the management costs associated with implementing this treatment restriction. Another risk is that Mast Out ^® likely will be priced at a premium to the traditional antibiotic products currently on the market.

In July 2007, we began preparations for the pivotal effectiveness study required for FDA approval of Mast Out ^® . Such preparations included the production of registration batches of drug product at 10% of the scale anticipated for commercial manufacture to fulfill the pivotal regulatory requirements of effectiveness, target animal safety, and stability. In June 2008, we initiated the pivotal effectiveness study. Positive results from the study were announced on September 30, 2009. With enrollment of approximately 300 qualified cows with subclinical mastitis, the Mast Out ^® treatment group showed a statistically highly significant (p<0.0001) overall cure rate in comparison to the placebo group. We believe that the breakdown of the data by species suggests both the necessary numerical superiority and clinical relevancy to support robust product performance in the field. For example, one of the most important mastitis pathogens, coagulase-negative staphylococci, predominated in our study, and Mast Out ^® achieved almost 10-fold higher cure rates than the placebo-treated animals against this pathogen. Further, Mast Out ^® treatment was associated with a statistically significant (p<0.005) reduction in milk somatic cell count (SCC), which is an important measure of milk quality.

Commercial introduction of Mast Out ^® in the United States is subject to approval of our New Animal Drug Application (NADA) by the FDA, which approval cannot be assured. Foreign regulatory approvals would be required for sales in key markets outside of the United States and would involve some similar and some different requirements. The NADA is comprised of several Technical Sections subject to the FDA’s phased review of a NADA. Each Technical Section submission is subject to a six-month review cycle by the FDA. The current status of our work on these Technical Sections is as follows:

1) Environmental Impact: During the third quarter of 2008, we received the Environmental Impact Technical Section Complete Letter from the FDA.

2) Effectiveness: On September 30, 2009, we announced that we had met the pivotal effectiveness study end point. We accomplished our primary objective, which was to demonstrate effectiveness in the field at a level similar to currently marketed intramammary antibiotics. Additionally, we confirmed prior results from two major field studies conducted since 2003. We submitted the Effectiveness Technical Section to the FDA for review in August 2010. This 65 volume submission contains the results from our pivotal trial conducted from 2008 to 2009 as well as all supporting data related to the effectiveness of Nisin as an intramammary treatment for subclinical mastitis in lactating cows.

3) Target Animal Safety: Under a protocol approved in advance by the FDA, the pivotal Target Animal Safety trial was completed during the first quarter of 2010. We intend to submit the Target Animal Safety Technical Section to the FDA for review during the third quarter of 2010.

4) Human Food Safety: The Human Food Safety data determines if a milk discard period or meat withhold period will be required. This Technical Section includes several subsections such as residue chemistry (the necessary laboratory work was completed during the second quarter of 2010, and we expect to make the pivotal residue chemistry submission during the third quarter of 2010), total metabolism (which is complete), effects of drug residues in food on human intestinal microbiology (which is complete), effects on bacteria of human health concern or antimicrobial resistance (which is complete) and toxicology (which is complete). A zero meat withhold requirement, during the course of and for any period following treatment, has been granted. The Acceptable Daily Intake (ADI) level for humans proposed by us has been accepted by the FDA, and this ADI continues to support a zero milk discard claim. All of these subsections must be completed before the Human Food Safety Technical Section Complete Letter establishing a zero milk discard (or a milk discard period) can be issued by the FDA.

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5) Chemistry, Manufacturing and Controls (CMC): We are developing collaborations with manufacturers to produce inventory for us utilizing our proprietary technology and processes. We have entered into a long-term exclusive supply agreement with Plas-Pak Inc. of Norwich, Connecticut covering the proprietary syringe that was developed specifically for Mast Out ^® . These syringes were used for all pivotal studies of Mast Out ^® . During July 2010, we entered into a development and long-term supply agreement with Lonza Sales, Ltd of Basel, Switzerland covering the exclusive manufacture of pharmaceutical-grade Nisin by Lonza for us. The identified manufacturing site in Europe is FDA-approved, compliant with current Good Manufacturing Practices (cGMP) regulations and subject to future FDA approval and inspection. We are negotiating a manufacturing relationship with an FDA-approved drug product manufacturer to formulate the Active Pharmaceutical Ingredient (API) into drug product, conduct sterile-fill of syringes and perform final packaging. The timing of the CMC Technical Section submission and review defines the critical path to FDA approval of the product. We presently expect to make a first submission of the CMC Technical Section to the FDA for review during the fourth quarter of 2010. We expect that a second submission will be required by the FDA before a Technical Section Complete Letter could be issued.

6) Several Administrative Requirements: After we obtain all the Technical Section Complete Letters and we prepare materials responsive to the other administrative requirements, we would assemble the administrative NADA submission for final review by the FDA. The timing of the administrative NADA submission and the timing of a market launch (if the FDA grants approval) will be determined by the FDA’s responses to our Technical Section submissions and successful resolution of any identified issues. Assuming no unanticipated delays in this process, we believe we could make the administrative NADA submission to the FDA by the end of 2011. A sixty-day review period of the administrative NADA would be expected. Test market sales of product produced for the validation batches under the CMC Technical Section could be initiated upon FDA approval.

In addition to our work on Mast Out ^® , we are actively exploring further improvements, extensions or additions to our current product line. For example, we currently are investigating therapies that could prevent scours in calves caused by enteric pathogens other than E. coli K99 and bovine coronavirus (the current First Defense ^® claims). In connection with that effort, during the second quarter of 2009 we entered into an exclusive license with Baylor College of Medicine covering certain rotavirus vaccine technology. This perpetual license (if not terminated for cause) is subject to milestone and royalty payments. Results from pilot studies completed during the first quarter of 2009 justify continued product development. We expect to initiate a pivotal effectiveness study during the fourth quarter of 2010. Successful results could position us for USDA approval of an additional disease claim for First Defense ^® to prevent scours caused by rotavirus in 2011. As additional opportunities arise to commercialize our own technology, or licensable technology, we may begin new development projects. While we continue to pursue internally funded product development programs, we also remain interested in acquiring new products and technologies that fit with our sales focus on the dairy and beef industries.

Because we believe that market opportunities for growth of First Defense ^® sales exist in foreign territories, we are working with in-country consultants in key markets to help us through the process of seeking foreign regulatory approvals. Regulatory authorities in some foreign territories may require that our manufacturing operations be compliant with cGMP regulations. Because of import restrictions, in-country production may be required to gain regulatory approval to sell First Defense ^® in Australia and New Zealand. In March 2008, we entered into a license agreement with Immuron, Ltd. of Australia (formerly known as Anadis). Under this agreement, we gained access to relevant production technology and capabilities of Immuron in Australia. We are obligated to pay Immuron a royalty on any sales of First Defense ^® manufactured in Australia in collaboration with Immuron.

We are making a sustained investment to comply with cGMP regulations across our product lines. We believe that compliance with cGMP standards increases our product quality and compliance with current regulations applicable to certain of our products and may open access to foreign markets where such standards are imposed.

General and Administrative Expenses

During the three-month period ended June 30, 2010, general and administrative expenses decreased by 3%, or $7,000, to $225,000 as compared to the same period in 2009. During the six-month period ended June 30, 2010, general and administrative expenses decreased by less than 1%, or $2,000, to $463,000 as compared to the same period in 2009. While we implement efficiencies where possible, we continue to incur costs associated with complying with the Sarbanes-Oxley Act of 2002 and other costs associated with being a publicly-held company.

At this stage in our development, we have limited our investment on investor relations spending. We provide a full disclosure of the status of our business and financial condition in three quarterly reports and one annual report each year. Additional information about us is available in our annual Proxy Statement. All of these reports are filed with the SEC and

ImmuCell Corporation

are available on-line or upon request to the Company. At this time, our financial and time resources are heavily committed to principally developing Mast Out ^® and operating our commercial business. Our board of directors is very involved with this resource allocation. While this strategy is subject to change, we believe that this focus currently is in the best long-term interest of all stockholders.

Sales and Marketing Expenses

During the three-month period ended June 30, 2010, sales and marketing expenses increased by 29%, or $25,000, to $108,000, as compared to the same period in 2009, aggregating 10% and 8% of product sales during the three-month periods ended June 30, 2010 and 2009, respectively. During the six-month period ended June 30, 2010, sales and marketing expenses increased by 31%, or $66,000, to $278,000, as compared to the same period in 2009, aggregating 12% and 9% of product sales during the six-month periods ended June 30, 2010 and 2009, respectively. The increases were expected given our strategic decision to invest in additional sales and marketing personnel and efforts. Our objective is to maintain the ratio of product selling expenses to product sales below 15% on an annual basis.

Loss Before Income Taxes and Net Loss

Our loss before income taxes of $(37,000) during the three-month period ended June 30, 2010 compares to our loss before income taxes of $(282,000) during the three-month period ended June 30, 2009. Our income tax benefit was 82% and 48% of our loss before income taxes during the three-month periods ended June 30, 2010 and 2009, respectively. Our net loss for the three-month period ended June 30, 2010 was $(6,000), or less than $(0.01) per share, in comparison to a net loss of $(148,000), or $(0.05) per share, during the three-month period ended June 30, 2009. Our loss before income taxes of $(102,000) during the six-month period ended June 30, 2010 compares to our loss before income taxes of $(319,000) during the six-month period ended June 30, 2009. Our income tax benefit was 41% and 43% of our loss before income taxes during the six-month periods ended June 30, 2010 and 2009, respectively. Our net loss for the six-month period ended June 30, 2010 was $(60,000), or $(0.02) per share, in comparison to a net loss of $(182,000), or $(0.06) per share, during the six-month period ended June 30, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Our decision to continue developing Mast Out ^® after the product rights were returned to us in 2007 has caused us to increase our spending on product development expenses that were previously funded by Pfizer. After the nine consecutive years of profitability that we recorded during the years ended December 31, 1999 to December 31, 2007, we incurred net losses of $(216,000) and $(469,000) during 2009 and 2008, respectively, and $(60,000) during the six-month period ended June 30, 2010. We are projecting further net losses during the second half of 2010 and for 2011. We believe that the commercial prospects for Mast Out ^® warrant this level of investment.

The investment required for full commercial manufacture of Nisin API is expected to exceed our cash, cash equivalents and short-term investments balance as of June 30, 2010. We believe that in this market environment, the option to generate funds through the sale of equity securities at an acceptable level of stockholder dilution is very unlikely. In August 2010, we agreed to terms of certain credit facilities with TD Bank, N.A. aggregating up to approximately $2,100,000, which are secured by substantially all of our assets. These credit facilities are comprised of a ten-year mortgage loan of $1,000,000, a $600,000 five-year loan and a $500,000 line of credit, which is renewable annually. Proceeds from the $1,000,000 mortgage were received in August 2010. Proceeds from the $600,000 loan are expected in February 2011 and the $500,000 line of credit is available as needed. We believe that this debt financing (together with available cash and gross margin from ongoing product sales) provides us with sufficient funding to finance our working capital requirements while completing the development of Mast Out ^® . At this point, the most expensive and time-consuming initiative remaining to be completed is the scale-up and testing of the Nisin API manufacturing process. We have committed almost $550,000 to Lonza (our API manufacturer) to generate the data required for a first submission of the CMC Technical Section. This work is expected to be conducted during the second half of 2010. Subject to obtaining acceptable results from this work, we may choose to make additional and larger financial commitments to Lonza on a stage-by-stage basis to complete the manufacturing process development and to fund the production of validation batches for inventory that would be required for the second submission of the CMC Technical Section. We expect to have product produced for the validation batches under the CMC Technical Section to sell (subject to FDA approval) in a test market by the end of 2011. Additional financing (most likely through a partner) needs to be arranged to pay for commercial batches of product for full market launch in 2012. Upon completion of this product development effort, we expect to return to profitable operations with or without new sales of Mast Out ^® .

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As we implement process improvements, we are investing in personnel, equipment and facility modifications to increase the efficiency and quality of our operations. In 2008, our Board of Directors authorized an investment of approximately $1,314,000 for capital expenditures (facility modifications and production equipment). We did not increase this authorized limit during 2009 or to date in 2010. As of July 1, 2010, we had remaining authorization to spend up to $350,000 on capital expenditures, net of payments made from January 1, 2008 through June 30, 2010.

Cash, cash equivalents and short-term investments decreased by 8%, or $369,000, to $4,217,000 at June 30, 2010 from $4,585,000 at December 31, 2009. Net cash used for operating activities amounted to $(275,000) during the six-month period ended June 30, 2010 in comparison to net cash used for operating activities of $(233,000) during the six-month period ended June 30, 2009. Total assets decreased by less than 1%, or $80,000, to $9,905,000 at June 30, 2010 from $9,985,000 at December 31, 2009. We had no outstanding bank debt or open line of credit as of June 30, 2010. Net working capital increased by less than 1% , or $18,000, to $5,962,000 at June 30, 2010 from $5,944,000 at December 31, 2009. Stockholders’ equity decreased by less than 1% , or $45,000, to $9,577,000 at June 30, 2010 from $9,622,000 at December 31, 2009. We believe that we have sufficient capital resources to meet our working capital requirements and to finance our ongoing business operations during at least the next twelve months. Our current resources, together with the proceeds from the debt commitment we entered into during the third quarter of 2010, are expected to be sufficient to fund the completion of the Mast Out ^® product development effort. The production of commercial batches of inventory for a market launch of Mast Out ^® (if the product is approved by the FDA) would require additional funding. It is not necessary for this funding to occur within the next twelve months.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of the individual who serves as our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2010. Based on this evaluation, that officer concluded that our disclosure controls and procedures were effective as of that date. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) is accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Controls over Financial Reporting

The individual who serves as our principal executive and principal financial officer periodically evaluates any change in internal control over financial reporting which has occurred during the prior fiscal quarter. Management has concluded that there was no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ImmuCell Corporation

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Not applicable

ITEM 1A. RISK FACTORS

Risk Factors; Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, but are not limited to, any statements relating to: projections of future financial performance; the scope and timing of future product development work and commercialization of our products; future costs of product development efforts; the timing and outcome of pending or anticipated applications for future regulatory approvals; future regulatory requirements relating to our products; future realization of deferred tax assets; factors that may affect the dairy industry and future demand for our products; the accuracy of our understanding of our distributors’ ordering patterns; anticipated changes in our manufacturing capabilities and efficiencies; the amount of future investments in facility modifications and production equipment or the availability and cost of alternative manufacturing and/or distribution resources; the future adequacy of our working capital and the availability of third party financing; future expense ratios; costs and timing associated with sustaining compliance with cGMP regulations; anticipated competitive and market conditions; and any other statements that are not historical facts. Forward-looking statements can be identified by the use of words such as “expects”, “may”, “anticipates”, “intends”, “would”, “could”, “should”, “will”, “plans”, “believes”, “estimates”, “targets” and similar words and expressions. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in development, testing, regulatory approval, production and marketing of our products, competition within our anticipated product markets, the uncertainties associated with product development, changes in laws and regulations, decision making by regulatory authorities and other risks detailed from time to time in filings we make with the Securities and Exchange Commission, including our Quarterly Reports on Form 10-Q, our Annual Reports on Form 10-K and our Current Reports on Form 8-K. Such statements are based on our current expectations, but actual results may differ materially due to various factors, including the risk factors summarized below and uncertainties otherwise referred to in this Quarterly Report. In addition, there can be no assurance that future developments affecting us will be those that we anticipate, especially considering the effects the distress in credit and capital markets will have on our customers and the global economy and the uncertainties surrounding the potential for a prolonged global recession.

Projections of loss before income taxes and net loss : After nine consecutive years of reporting net income, we reported a loss before income taxes of $(961,000) and a net loss of $(469,000) for the year ended December 31, 2008, a loss before income taxes of $(429,000) and a net loss of $(216,000) for the year ended December 31, 2009 and a loss before income taxes of $(102,000) and a net loss of $(60,000) during the six-month period ended June 30, 2010, due in large part to our current product development strategy. Continued development of Mast Out ^® will likely result in a net loss during the second half of 2010 and during 2011 as well. We believe that our current balance of cash and short-term investments is more than sufficient to fund our projected loss in 2010. We believe that our remaining cash and short-term investments, together with gross margin generated from ongoing product sales and the debt financing arranged in August 2010, is sufficient to fund our projected loss in 2011. The market launch of Mast Out ^® will require additional capital. There is no assurance that we will have sufficient capital to fund our growth plans, but we do expect to return to profitable operations with or without new sales of Mast Out ^® in 2012. Generally speaking, our financial performance can differ significantly from management projections, due to numerous factors that are difficult to predict or that are beyond our control. Stronger than expected sales of First Defense ^® , for example, could diminish the overall loss. Conversely, weaker than expected sales of First Defense ^® could lead to larger losses. Another example of a factor that could increase our loss is if we experience unanticipated costs associated with developing and seeking regulatory approval of Mast Out ^® . Historically, we have not publicly disclosed our projections of future profitability. We did so in 2008 and 2009 and have done so again for 2010 and 2011 to make it clear to our stockholders that the decision to pursue internal development of Mast Out ^® entails an important change in our financial model and strategy that, we believe, is in the long-term interests of the Company and its stockholders.

Exposure to risks associated with the current financial downturn and global economic crisis: The U.S. economy is either in a recession, or just coming out of a recession, caused principally by the housing, credit and financial crises. The credit markets are very turbulent and uncertain. Sales and financial performance are down at most businesses. This extraordinary period of instability facing the U.S. economy and the financial markets has been troubling for nearly all

ImmuCell Corporation

Americans. To survive, companies are eliminating jobs, cutting or freezing pay, trimming hours, suspending matching contributions to 401(k) plans, reducing or doing away with health insurance, bonuses, or perks that were offered during better economic times, among other cost-saving measures. A continued and prolonged economic downturn could have a corresponding negative effect on our business and operations.

Economics of the dairy industry : The U.S. dairy industry has been facing very difficult economic pressures, which are forcing many dairy producers out of business. The size (annual average) of the U.S. dairy herd ranged from approximately 9,011,000 to 9,199,000 cows from 1998 to 2007. This annual average jumped to 9,315,000 cows in 2008. A significant decrease in the herd size was expected in 2009, but the average only declined to 9,200,000. The herd size peaked at 9,334,000 in December 2008 and did decline to 9,082,000 in December 2009. As of June 2010, the herd size is estimated to be approximately 9,101,000 cows. The size of the milking herd affects the price of milk. The impact on the milk supply from this decrease in cows is offset, in part, by an increase in milk production per cow. Sales of our products may be influenced by the prices of milk, milking cows and calves. A common index used in the industry to measure the price of milk is known as the Class III milk price, which indicates the value of 100 pounds of milk sold into the cheese market. The average Class III milk price for 2008 was $17.44 per 100 pounds, which represented a 3% decrease from the 2007 average of $18.04. For 2009, this price level averaged $11.36, which represents a 35% decrease from 2008. The average price for 2009 was 36% lower than the average experienced during the two-year period ended December 31, 2008. During the first six months of 2010, this price level averaged $13.58 in comparison to $10.19 during the first six months of 2009. The Class III milk price (which is largely out of the direct control of individual dairy producers) is an important indicator because it defines our customers’ revenue level. While the number of cows in the U.S. herd and the production of milk per cow directly influence the supply of milk to the market, demand for milk has been largely influenced by very volatile foreign demand for milk products. However, the actual level of milk prices may be less important than their level relative to costs. Costs to produce milk are significant and to some extent can be managed by dairy producers. One measure of this relationship is known as the milk-feed price ratio, which represents the amount of feed that one pound of milk can buy. Whenever this ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk. For 2008, this ratio averaged 2.01. For 2009, this ratio averaged 1.78, representing a 12% decrease compared to 2008. During the first six months of 2010, this ratio averaged 2.25 in comparison to 1.53 during the first six months of 2009. This means that a dairy producer can buy only 2.25 pounds of feed for every pound of milk sold. An increase in feed costs also has a negative impact on the beef industry. Another indication of the economic condition of the dairy industry is the average price for animals sold for dairy herd replacement. In 2008, this average price (reported as of January, April, July and October) is estimated to have increased to approximately $1,953, which was a 6% increase over 2007. This price averaged approximately $1,385 in 2009, which represented a 29% decrease in comparison to the same period in 2008. The average of this price as of January, April and July 2010 was $1,330 as compared to $1,433 as of January, April and July 2009. The dairy industry data referred to above is compiled from USDA databases. Another factor in the demand for our product is the value of bull calves. The decline in the price of bull calves has reduced the return on investment from a dose of First Defense ^® for bull calves. We are trying to maintain and grow our sales for use with heifer calves to offset what we assume is a significant loss in our sales for bull calves. Given our focus on the dairy and beef industries, the financial insecurity of our primary customer base is a risk to our ability to maintain and grow sales at a profitable level. Further, the loss of farms from which we buy raw material for First Defense ^® could make it difficult for us to produce enough inventory until supply agreements are reached with replacement farms on suitable terms.

Product risks generally: The sale of our products is subject to financial, efficacy, regulatory and market risks. We cannot be sure that we will be able to maintain the regulatory compliance required to continue selling our products. There is no assurance that we will continue to achieve market acceptance at a profitable price level or that we can continue to manufacture our products at a sufficient gross margin.

Product Liability : The manufacture and sale of certain of our products entails a risk of product liability. Our exposure to product liability is mitigated to some extent by the fact that our products are principally directed towards the animal health market. We have maintained product liability insurance in an amount which we believe is reasonable in relation to our potential exposure in this area.

Reliance on sales of First Defense ^® : We are heavily reliant on the market acceptance of First Defense ^® to generate product sales and fund our operations. Our business would not have been profitable during the nine consecutive years in the period ended December 31, 2007, and our net losses would have been larger during the years ended December 31, 2008 and 2009 and the six-month period ended June 30, 2010, without the gross margin that we earned from the sale of First Defense ^® .

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Concentration of sales: A large portion of our product sales (47% and 49% for the years ended December 31, 2008 and 2009, respectively) was made to three large distributors. A large portion of our trade accounts receivable (62% as of December 31, 2009) was due from these three distributors. These three distributors accounted for 48% of our product sales during the first six months of 2010 and 45% of our trade accounts receivable as of June 30, 2010. We have a good history with these distributors, but the concentration of sales and accounts receivable with a small number of customers does present a risk to us.

Product development risks: Our current strategy relies heavily on the development of new products, the most important of which is Mast Out ^® . The development of new products is subject to financial, scientific, regulatory and market risks. In particular, the development of Mast Out ^® requires (and will continue to require) substantial investments by us, and there is no assurance that we will obtain all of the clinical and other data necessary to support regulatory approval for this product. The market for the treatment of mastitis in dairy cows is highly competitive, and presently is dominated by large companies such as Pfizer, Merck/Intervet/Schering Plough and Boehringer Ingelheim. There is no assurance that Mast Out ^® will compete successfully in this market.

Regulatory requirements for Mast Out ^® : The commercial introduction of Mast Out ^® in the United States will require us to obtain appropriate FDA approval for this product. Approval of a zero milk discard claim is an important competitive feature of this product. It presently is uncertain whether or when this approval will be achieved. Such approval will also require a successful inspection under cGMP standards by the FDA of the facility we have selected to manufacture the product. We are exposed to additional regulatory compliance risk through the subcontractors that we choose to work with to produce Mast Out ^® . Foreign regulatory approvals would be required for sales outside of the United States. European regulatory authorities are not expected to approve a product with a zero milk discard claim, which would remove a significant competitive advantage of Mast Out ^® in that territory.

Risks associated with USDA regulatory oversight : Two of our products, and modifications and extensions thereto, are subject to the jurisdiction of the Center for Veterinary Biologics, USDA. Recent budgetary constraints at the USDA have caused significant delays in rulings and responses to submissions, according to the Association of Veterinary Biologics Companies, of which we are a member. Similar regulatory oversight risks exist in territories outside of the United States where we sell our products.

Regulatory requirements for First Defense ^® : First Defense ^® is sold in the United States subject to a product license approval from the USDA, first obtained in 1991. The potency of serial lots is directly traceable to the original serial used to obtain the product performance claims (the “Reference Standard”). Due to the unique nature of the First Defense ^® label claims, host animal re-testing is not required as long as periodic laboratory analyses continue to support the stability of stored Reference Standard. To date, these analyses have demonstrated strong stability. However, if the USDA were not to approve requalification of the Reference Standard, additional clinical studies could be required to meet regulatory requirements and allow for continued sales of the product.

Regulatory requirements for Wipe Out ^® Dairy Wipes : While the FDA regulates the manufacture and sale of Wipe Out ^® , this type of product is permitted to be sold without a NADA approval, in accordance with the FDA’s Compliance Policy Guide 7125.30 (“Teat Dips and Udder Washes for Dairy Cows and Goats”). This policy guide could be withdrawn at the FDA’s discretion, in which case we would likely discontinue sales of the product. The manufacture of Wipe Out ^® is subject to Part 211 of the cGMP regulations. As such, our operations are subject to inspection by the FDA. We continue to invest in personnel, facility improvements and new equipment to sustain compliance with cGMP regulations across our entire product line. In June 2007, we received a Warning Letter from the FDA citing deficiencies in specific areas of the cGMP regulations. We filed a response to the FDA in June 2007, and we responded to a request for additional information in April 2008. We believe we have substantially corrected the deficiencies cited, but we remain subject to the risk of adverse action by the FDA in this respect.

Uncertainty of market estimates : Even assuming that Mast Out ^® achieves regulatory approval in the United States with a zero milk discard requirement, estimating the size of the market for this product is subject to numerous uncertainties. Some of the uncertainties surrounding our product include the development of the subclinical mastitis treatment market, coverage of relevant pathogens, selling price and its effect on market penetration, cost of manufacture, integration of milk from treated cows into cheese starter cultures and market acceptance.

Competition from others: Many of our competitors are significantly larger and better established in the relevant markets, and have substantially greater financial, marketing, manufacturing and human resources and more extensive product

ImmuCell Corporation

development capabilities than do we, including greater ability to withstand adverse economic or market conditions and declining revenues and/or profitability. We may not be aware of other companies that compete with us. Our competitive position will be highly influenced by our ability to attract and retain key scientific and managerial personnel, to develop proprietary technologies and products, to obtain USDA or FDA approval for new products and to continue to profitably sell our current products. We currently compete on the basis of product performance, price and distribution capability. We continue to monitor our network of independent distributors to maintain our competitive position.

Failure to protect intellectual property: In some cases, we have chosen (and may choose in the future) not to seek patent protection for certain products or processes. Instead, we have sought (and may seek in the future) to maintain the confidentiality of any relevant proprietary technology through contractual agreements. Reliance upon trade secret, rather than patent, protection may cause us to be vulnerable to competitors who successfully replicate our manufacturing techniques and processes. Additionally, there can be no assurance that others may not independently develop similar trade secrets or technology or obtain access to our unpatented trade secrets or proprietary technology. Other companies may have filed patent applications and may have been issued patents involving products or technologies potentially useful to us or necessary for us to commercialize our products or achieve our business goals. There can be no assurance that we will be able to obtain licenses to such patents on terms that are acceptable. There is a risk that competitors could challenge the claims in patents that have been issued to us.

Small size : We are a small company with 28.5 full-time equivalent employees. As such, we rely on certain key employees to support different operational functions, with limited redundancy in capacity. The loss of any of these key employees could adversely affect our operations until a qualified replacement is hired and trained.

Our reporting obligations as a public company are costly: Operating a public company involves substantial costs to comply with reporting obligations under federal securities laws that are continuing to increase as provisions of the Sarbanes-Oxley Act of 2002 are implemented.

Access to raw materials : Our policy is to maintain more than one source of supply for the components used to manufacture and test our products. However, there is a risk that we could have difficulty in efficiently acquiring essential supplies. We are dependent on our manufacturing operations and facility at 56 Evergreen Drive in Portland, Maine for the production of First Defense ^® and Wipe Out ^® Dairy Wipes and will be dependent on Lonza for the manufacture of Mast Out ^® if that product proceeds to commercialization. The specific antibodies that we purify for First Defense ^® and the Nisin we produce by fermentation for Wipe Out ^® Dairy Wipes are not readily available from other sources. Any significant damage to or other disruption in the services at these facilities could adversely affect the production of inventory and result in significant added expenses and loss of sales.

Bovine diseases : The potential for epidemics of bovine diseases such as Foot and Mouth Disease, Bovine Tuberculosis, Brucellosis and Bovine Spongiform Encephalopathy (BSE) presents a risk to us and our customers. Documented cases of BSE in the U.S. have led to an overall tightening of regulations pertaining to ingredients of animal origin, especially bovine. First Defense ^® is considered a veterinary medicine rather than a feed ingredient, and it is manufactured from bovine milk and colostrum, which is not considered a BSE risk material. Future regulatory action to increase protection of the human food supply could affect First Defense ^® , although presently we do not anticipate that this will be the case.

Biological terrorism : The threat of biological terrorism is a risk to both the economic health of our customers and to our ability to economically acquire and collect good quality raw material from our contract farms. Any act of widespread bioterrorism against the dairy industry could adversely affect our operations.

No expectation to pay any dividends for the foreseeable future: We do not anticipate paying any dividends to our shareholders for the foreseeable future, instead using cash to fund product development costs. Also, any debt or equity financing we obtain to assist in funding our product development programs may include terms prohibiting or restricting our paying dividends or repurchasing stock for a lengthy period. Shareholders must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Any determination to pay dividends in the future will be made at the discretion of our Board of Directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors our Board of Directors deems relevant.

Market for common stock : Our common stock trades on the Nasdaq Stock Market (NASDAQ: ICCC). Our average daily trading volume is lower than the volume for many other companies, which could result in investors facing difficulty selling their stock for proceeds that they may expect or desire.

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ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not applicable

ITEM 4.

RESERVED

ITEM 5.

OTHER INFORMATION

Not applicable

ITEM 6.

EXHIBITS



Exhibit 10.1 ⁽¹⁾		Development and Manufacturing Agreement between the Company and Lonza Sales, Ltd. dated July 15, 2010.

Exhibit 10.2		Commercial Promissory Note for $1,000,000 between the Company and TD Bank, N.A. dated August 13, 2010.

Exhibit 10.3		Commercial Promissory Note for $600,000 between the Company and TD Bank, N.A. dated August 13, 2010.

Exhibit 10.4		Line of Credit Agreement and Promissory Note for up to $500,000 between the Company and TD Bank, N.A. dated August 13, 2010

Exhibit 10.5 ⁽¹⁾		Loan Agreement between the Company and TD Bank, N.A. dated August 13, 2010.

Exhibit 31		Certifications required by Rule 13a-14(a).

Exhibit 32		Certification pursuant to Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)	Confidential Treatment as to certain portions has been requested, which portions have been omitted and filed separately with the Securities and Exchange Commission.

ImmuCell Corporation

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ImmuCell Corporation
	Registrant

Date: August 16, 2010	By:	/ S / M ICHAEL F. B RIGHAM
		Michael F. Brigham
		President, Chief Executive Officer and Principal Financial Officer

ImmuCell Corporation

EXHIBIT 10.1

Development and Manufacturing Agreement between the Company and Lonza Sales, Ltd. dated July 15, 2010.

Confidential Treatment as to certain portions has been requested, which portions have been omitted and filed separately with the Securities and Exchange Commission

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FINAL EXECUTION COPY

Development and Manufacturing Agreement

Effective as of July 15, 2010 (the “Effective Date”)


by and between

LONZA Sales Ltd
Münchensteinerstrasse 38
4002 Basel
Switzerland;

		- hereinafter “LONZA” -

and

IMMUCELL CORPORATION
56 Evergreen Drive
Portland, Maine 04103 USA

		- hereinafter “IMMUCELL” -

in relation to the development and manufacture of Nisin by LONZA for IMMUCELL

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WHEREAS

A.	IMMUCELL has developed, continues to develop, and is the owner of certain products, including without limitation the intra-mammary infusion product which utilizes the active ingredient Nisin to be marketed under the trademark MAST OUT ^® (the “MAST OUT ^® Product”); and

B.	LONZA has expertise in the evaluation, development and production of therapeutic proteins for therapeutic use; and

LONZA and IMMUCELL have entered into that certain Technology and Material Transfer and Evaluation Agreement dated as of November 12, 2009 (the “Transfer and Evaluation Agreement”), pursuant to which, among other things, IMMUCELL transferred the Process for the development and manufacture of Nisin (as defined below, the “Product”); and

D.	LONZA agrees to provide development and manufacturing services to IMMUCELL for the development and manufacture of Product, and IMMUCELL agrees to contract LONZA for services relating to the development and manufacture of Product as hereinafter described in this Agreement, and

E.	LONZA is prepared to perform such services for IMMUCELL on the terms and conditions set out herein.

NOW IT IS AGREED AS FOLLOWS:

1.	Definitions and Interpretation

The following terms shall have the following meanings unless the context requires otherwise:


		“Affiliate”		means any company, partnership or other entity which directly or indirectly Controls, is Controlled by or is under common Control with the relevant party to this Agreement. “Control” means the ownership of more than fifty per cent (50%) of the issued share capital or the legal power to direct or cause the direction of the general management and policies of the party in question; For the benefit of clarity, Lonza Biotec s.r.o. of Kourim, Czech Republic is an Affiliate of LONZA;

		“Agreement”		means this Development and Manufacturing Agreement incorporating all Schedules and Exhibits and as amended or varied from time to time by written agreement of the parties;

		“cGMP Batch”		means the total Product obtained from one fermentation and associated purification run using the Process carried out in LONZA’s Facility);

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		“Engineering Batch”		has the meaning set forth in Schedule 2, Stage 7.

		“Validation Batch”		has the meaning set forth in Schedule 2, Stage 8.

		“CommercialBatch”		xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

		“Commercial Campaign”		xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

		“Certificate of Analysis”		means a written certified analysis of test results that show Product conformance (or lack thereof) to the Product Specifications set forth in Schedule 1.

		“cGMP”		means current Good Manufacturing Practices as promulgated under the U. S. Food Drug and Cosmetic Act at 21 CFR (Chapters 210, 211, 600 and 610) and the Guide to Good Manufacturing Practices for Medicinal Products as promulgated under European Directive 91/356/EEC. For the avoidance of doubt, LONZA’s operational quality standards are defined in internal GMP policy documents;

		“Confidential Information”		means “Information”, IMMUCELL Information” and “LONZA Information” as defined in the Confidentiality Agreement entered into by and between IMMUCELL and LONZA on May 5, 2008. “Confidential Information” also includes all copies, notes or extracts of IMMUCELL Information or LONZA Information, as applicable, as well as any summaries, memoranda and other documents based theron or derived therefrom, whether made by LONZA or IMMUCELL. The Parties agree that Confidential Information includes, without limitation, the IMMUCELL Intellectual Property, the LONZA Intellectual Property, the IMMUCELL Materials, the LONZA Developments, the IMMUCELL Developments and this Agreement.

		“Deliver”, “Delivered” or “Delivery”		has the meaning given to it in Clause 6;

		“Developments”		means all developments, including but not limited to, ideas, concepts, discoveries, inventions, developments, material, technology, know-how, formulas, trade secrets, techniques, methodologies, modifications, innovations, improvements, writings, documentation, data, research materials and rights (whether or not protectable under state, federal, or foreign patent, trademark, copyright or similar laws) that are conceived, discovered, invented, developed, created, made or reduced to practice or tangible medium by IMMUCELL or LONZA (or under LONZA’s direction (solely or with others)) during the term of this Agreement.

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		“External Contractor”		means any third party entrusted by LONZA, with IMMUCELL’s consent, to conduct activities required to complete the Services, including but not limited to third parties that synthesize DNA or perform tests on the Production Strain, Product or materials derived therefrom;

		“Facility”		means the cGMP manufacturing facility of LONZA’s Affiliate Lonza Biotec s.r.o. in Kourim, Czech Republic;

		“IMMUCELL Information”		means all proprietary and confidential technical and other information owned by IMMUCELL and not known to LONZA or in the public domain relating to the IMMUCELL Materials, Production Strain, the IMMUCELL Intellectual Property (including for the avoidance of doubt Developments thereto from time to time) and the Product, from time to time supplied by IMMUCELL to LONZA;

		“IMMUCELL Intellectual Property”		means the IMMUCELL Technology and the IMMUCELL Patent Rights.

		“IMMUCELL Materials”		means the Production Strain and any progeny and derivatives (modified or unmodified) of the Production Strain provided by IMMUCELL to LONZA under this Agreement and identified as such by Schedule 1 hereto and any other materials provided by IMMUCELL to LONZA under this Agreement for use by LONZA in connection with LONZA’s performance of the Services;

		“IMMUCELL Patent Rights”		means the patents and patent applications identified in Exhibit A attached hereto, and any divisional, continuation or continuation-in-part of those applications, as well as any patents issued on the patent applications, and any reissues, reexaminations, extensions and substitutions (or the equivalent) thereof, and any foreign counterparts to those patents and patent applications. The IMMUCELL Patent Rights as they exist as of the Effective Date are set forth in Exhibit A . The parties agree that Exhibit A may be revised by the parties from time to time after the Effective Date to reflect changes thereto.

		“IMMUCELL Technology”		means any and all rights in and to discoveries, technical information, specifications, methods, formulae, the Process, inventions, ideas, know-how, materials (including the IMMUCELL Materials) and/or data (whether or not protectable under patent, copyright, trade secrecy or similar laws), including patents, utility models, and registered and unregistered designs, including copyrights, trade secrets and any other form of protection afforded by law to inventions, works of authorship, databases and/or technical information and applications and registrations with respect thereto that are necessary or useful in performance of the Services and which IMMUCELL is the

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				owner of or is entitled to use, excluding the LONZA Intellectual Property. The IMMUCELL Technology includes, but is not limited to, the IMMUCELL analytical methods used for in-process control and batch release; process for fermentation and isolation of Nisin; analytical SOPs and raw data formula identified and described in Schedule 2.

		“LONZA Intellectual Property”		means any and all rights in and to discoveries, technical information, specifications, methods, formulae, processes, inventions, ideas, know-how, materials and/or data (whether or not protectable under patent, copyright, trade secrecy or similar laws), including patents, utility models, and registered and unregistered designs, including copyrights, trade secrets and any other form of protection afforded by law to inventions, works of authorship, databases and/or technical information and applications and registrations with respect thereto that are necessary or useful in performance of the Services and which LONZA is the owner of or is entitled to use, excluding the IMMUCELL Intellectual Property;

		“LONZA Know-How”		means all proprietary and confidential technical and other information relating directly or indirectly to the Process and/or the performance of the Services owned by LONZA and not known by IMMUCELL or in the public domain;

		“Price”		means the price specified in Schedule 3 for the Services;

		“Process”		means the process for the development and production of the Product from the Production Strain, including any improvements or modifications thereto from time to time.

		“Product”		means all or any part of the product manufactured using the Process (including any sample thereof), particulars of which are set out in Schedule 1 and includes all derivatives thereof;

		“Production Strain”		means the lactococcus lactis strain provided by IMMUCELL for use in making Product, further particulars of which are set out in Schedule 1;

		“Services”		means all or any part of the development and manufacturing services under this Agreement (including, without limitation, fermentation and purification development, master, working and extended cell bank creation, and sample and bulk production, particulars of which are set out in Schedule 2;

		“Specification”		means the specifications for Product, particulars of which are set out in Schedule 1;

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		“Terms of Payment”		means the terms of payment specified in Schedule 3.

For purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires: (a) references to the singular number include the plural and vice versa and the use of the masculine shall include the feminine; (b) references to Clauses and Schedules are references to Clauses and Schedules to this Agreement; (c) “days” shall mean calendar days; (d) the use herein of the plural shall include the singular and vice versa; and (e) the words “ herein ,” “ hereof ,” “ hereunder ” and other words of similar import refer to this Agreement as a whole and not to any particular provision. Additional terms may be defined throughout this Agreement.

2.	Provision of the Services

2.1

LONZA shall diligently carry out the Services as provided in Schedules 1 and 2 and shall use all commercially reasonable efforts to achieve the estimated timescales set out in Schedule 2. LONZA shall perform the Services under this Agreement, including the development and manufacture of Product, in the Facility according to cGMP and the Specifications, as applicable, in accordance with Schedules 1 and 2. LONZA shall at all times use reasonable and adequate safety and protection measures to ensure that the results of the Services are not endangered by any unforeseen interruption of LONZA’s research and development activities. LONZA shall have the right to outsource certain activities included in the Services without the consent of IMMUCELL to an Affiliate, or – subject to IMMUCELL’s consent - to an External Contractor.

2.2

LONZA shall perform the Services, including the development and manufacture of Product in accordance with the Specification and cGMP, provided that there shall be no such obligation to meet the Specification in respect of the first two (2) Engineering Batches manufactured or in respect of the first batch of Product manufactured following any change in the Process agreed to or requested by IMMUCELL.

2.3

Owing to the unpredictable nature of the biological processes involved in the performance of the Services, in particular in connection with the development and manufacture of Product but subject to the provisions of Section 2.4, the timescales set down for the performance of the Services (including without limitation the dates for production and Delivery of Product) and the quantities of Product for Delivery set out in Schedule 2 are estimated only and shall therefore not be deemed binding obligations.

2.4

Without prejudice to LONZA’s obligations under Clauses 2.1 and 2.2 except as expressly provided below, IMMUCELL shall not be entitled to cancel any unfulfilled part of the Services that has been authorized by a Purchase Order issued by IMMUCELL pursuant to this Agreement, including without limitation Clause 7.4, or to refuse to accept the results of the Services on grounds of late performance, late delivery or failure to produce the estimated quantities of Product for Delivery. LONZA shall not be liable for any loss, damage, costs or expenses of any nature, whether direct or consequential, occasioned by:

(a) any delay in performance or Delivery howsoever caused; or

(b) any failure to produce the estimated quantities of Product for Delivery.

Notwithstanding the foregoing, if there is a material failure by LONZA to produce the agreed estimated quantities (if any) of Product for Delivery (other than due to the unpredictable nature

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of the biological processes involved in the performance of the Services)xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxIMMUCELL being released (at its option) from any obligations under firm purchase orders outstanding in accordance with Section 6.1 or Section 6.2, subject to the obligations owing by IMMUCELL to LONZA under Section 10.2.

2.5	LONZA shall comply with the International Committee for Harmonization regulatory requirements from time to time applicable to the Services as set out in Schedule 2.

2.6	LONZA hereby undertakes not to use the Production Strain, IMMUCELL Materials, IMMUCELL Information and/or IMMUCELL Intellectual Property (or any part thereof) for any purpose other than the performance of the Services under this Agreement exclusively for IMMUCELL.

3.	IMMUCELL Materials

The following terms shall govern the transfer and use of the IMMUCELL Materials.

3.1

In General. In performing the Services, IMMUCELL will transfer the IMMUCELL Materials to LONZA for use in connection with the performance of the Services. All IMMUCELL Materials provided to LONZA by IMMUCELL, whether developed before or after the Effective Date, together with any progeny and derivatives (modified or unmodified), will be owned solely by IMMUCELL.

3.2

Legal Title; Use. Legal title to any IMMUCELL Materials transferred hereunder shall be unaffected by this Agreement or the transfer made hereunder. LONZA will use any IMMUCELL Materials transferred to LONZA solely in connection with the performance of the Services. Except as otherwise provided at law, the transfer of the IMMUCELL Materials to LONZA gives LONZA no rights in such material other than those specifically set forth in this Agreement. Any use of the IMMUCELL Materials by LONZA other than in accordance with this Agreement or as may be provided by law is a material breach of this Agreement.

3.3	LONZA shall:

(a)

at all times use all reasonable endeavors to keep the Production Strain and/or IMMUCELL Materials secure and safe from loss and damage in such manner as LONZA stores its own material of similar nature;

(b)

not part with possession of the Production Strain and/or IMMUCELL Materials or the Product, save for the purpose of activities at the Facility or the External Contractor or as otherwise authorized in writing by IMMUCELL; and

(c)

ensure that all External Contractors are subject to obligations of confidence substantially in the form of those obligations of confidence imposed on LONZA under this Agreement.

4.	Licenses; Restrictions

4.1	(a) Subject to the terms and conditions of this Agreement, IMMUCELL hereby grants to LONZA and its Affiliates during the term hereof a non-exclusive, non-transferable, limited license to use the IMMUCELL Intellectual Property, IMMUCELL Developments,

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the IMMUCELL Information and the IMMUCELL Materials for the sole purpose of performing the Services at the Facility. (b) LONZA specifically agrees and acknowledges that the license grant hereunder is limited to the performance of the Services during the term of this Agreement exclusively for IMMUCELL, and that there are no implied licenses granted in this Agreement. LONZA acknowledges, understands and agrees that no right or license is granted by IMMUCELL to LONZA , express or implied, under the IMMUCELL Intellectual Property, IMMUCELL Developments, the IMMUCELL Information or the IMMUCELL Materials except as expressly provided herein. LONZA agrees that it will not transfer, transmit or otherwise distribute, sublicense, or provide the IMMUCELL Intellectual Property, the IMMUCELL Developments, the IMMUCELL Information and the IMMUCELL Materials to any third party. LONZA agrees not to use the IMMUCELL Intellectual Property, the IMMUCELL Developments, the IMMUCELL Information and the IMMUCELL Materials in connection with the manufacture of any products or the provision of any services offered by LONZA for commercial sale or other use. LONZA will comply with all laws and regulations applicable to handling and use of the IMMUCELL Intellectual Property, the IMMUCELL Developments, the IMMUCELL Information and the IMMUCELL Materials.

4.2

For the avoidance of doubt, neither party will, as a result of this Agreement, acquire any right, title, or interest in any intellectual property that the other party owns or controls as of the Effective Date of this Agreement (i.e., the IMMUCELL Intellectual Property or the LONZA Intellectual Property, as applicable), or that the other party obtains ownership or control of separate and apart from the performance of the Services under this Agreement.

4.3

LONZA agrees that during the term of this Agreement it will not, directly or indirectly (including without limitation through any Affiliate, subsidiary, partnership or otherwise) for any other party, research, develop, manufacture, sell, license, distribute, use or otherwise exploit any products or services that are based on pharmaceutical grade Nisin. During the term of this Agreement, no LONZA Intellectual property, LONZA Know-How or LONZA Developments shall be introduced in regard to the Services provided without the prior written consent of IMMUCELL. In the event that IMMUCELL consents to the use of the LONZA Intellectual property, LONZA Know-How or LONZA Developments, IMMUCELL shall receive, and LONZA hereby grants to IMMUCELL, a non-exclusive, royalty-free license to use such LONZA Intellectual property, LONZA Know-How or LONZA Developments during the term of this Agreement, and a non-exclusive, royalty bearing license after the expiration or termination of this Agreement in the event that IMMUCELL desires to continue to use such LONZA Intellectual property, LONZA Know-How of LONZA Developments after the expiration of this Agreement.

xxxxxxxx xxxxxxx xxxxxx xxxxxx xxxxxxxx xxxxxxxx xxxxx xxxx xxxxx xxxxxxx xxxx xxxxx xxxxx xxxx xxx xxx xxxx xxxxx xxxx xxx xx xxx xxx xx xxxx xxx xxxxx xx xxxx xx x xx x xxx xxxx xxxx xxx xxxx

4.4

LONZA will keep complete and accurate records of the status and progress of the performance of the Services, including with respect to the development and manufacture of Product. LONZA shall keep IMMUCELL regularly and fully informed of the progress and status of the performance of the Services, through regular telephone conversations and meetings between IMMUCELL and LONZA. In addition, LONZA will advise and update IMMUCELL in writing on the progress and results of the performance of the Services and shall furnish IMMUCELL with copies of all data and other results of the performance of the Services, including without limitation all

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IMMUCELL Developments and LONZA Developments, if any.

5.	Developments

5.1

IMMUCELL Developments. LONZA acknowledges that IMMUCELL is and will at all times remain the owner of the IMMUCELL Intellectual Property, the IMMUCELL Information and the IMMUCELL Materials and nothing contained in this Agreement shall be interpreted to grant LONZA any license or other rights to the IMMUCELL Intellectual Property, the IMMUCELL Information and the IMMUCELL Materials except as expressly provided in this Agreement. All Developments (a) solely invented by IMMUCELL or that, as applicable, are (b) invented or reduced to practice by LONZA, by LONZA and IMMUCELL, or by LONZA and/or its Affiliates, the External Contractors or other contractors or agents of LONZA, by use of the IMMUCELL Intellectual Property, the IMMUCELL Materials, or the IMMUCELL Information, (c) directly related to the performance of the Services; or (d) at IMMUCELL’s expense (collectively, the “IMMUCELL Developments”), shall be the sole and exclusive property of IMMUCELL. IMMUCELL Developments do not include LONZA Developments. LONZA hereby assigns to IMMUCELL and shall continue to assign to IMMUCELL all of its right, title and interest in any IMMUCELL Developments. LONZA shall promptly disclose to IMMUCELL in writing all IMMUCELL Developments. LONZA shall execute, and shall require LONZA’s personnel involved in the performance of the Services to execute, any documents reasonably required to confirm IMMUCELL’s ownership of the IMMUCELL Developments, and any documents required to apply for, maintain and enforce any patent or other right in the IMMUCELL Developments. Upon IMMUCELL’s request and at IMMUCELL’s expense, and at no cost to LONZA, LONZA shall assist IMMUCELL as may be necessary to apply for, maintain and enforce any patent or other right in the IMMUCELL Developments. For the avoidance of doubt, the parties agree that the term “IMMUCELL Developments” shall not under any circumstances be interpreted or defined to include any “LONZA Developments”.

5.2

LONZA Developments. IMMUCELL acknowledges that LONZA is and will at all times remain the owner of the LONZA Intellectual Property and the LONZA Know-How and nothing contained in this Agreement shall be interpreted to grant IMMUCELL any license or other rights to the LONZA Intellectual Property or the LONZA Know-How. All Developments solely invented or reduced to practice by LONZA and/or its Affiliates, contractors or agents develops, conceives, invents, reduces to practice or makes in the course of performance of the Services and that (i) arises from or relates to the LONZA Know-How and/or Intellectual Property; and (ii) is severable from the IMMUCELL Developments and does not reveal or disclose such (collectively, the “LONZA Developments”), shall be the sole and exclusive property of LONZA.

5.3

IMMUCELL has supplied to LONZA IMMUCELL Information, together with full details of any hazards relating to the Production Strain, Product and/or IMMUCELL Materials, their storage and use. Property in the Production Strain and/or IMMUCELL Materials and/or IMMUCELL Information supplied to LONZA shall remain vested in IMMUCELL.

6.	Delivery, Transportation of Product and IMMUCELL Tests

6.1

IMMUCELL shall provide LONZA with a rolling 36-months forecast schedule of demand showing their estimated amount of Product during that period (“Forecast Schedule”). The Forecast Schedule shall be updated quarterly on a routine basis or immediately if a shift in order pattern or volumes is recognized. The first such Forecast Schedule shall be provided to LONZA on the Effective Date and thereafter by the fifth (5 ^th ) working day of the first month of each calendar quarter. Amount of Product detailed in the first twelve (12) months from the Effective Date will represent firm orders of Product (“Firm Forecast Schedule”). Firm orders made by IMMUCELL on the basis of the Firm Forecast Schedule shall be submitted by facsimile or in any other

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written or electronic form, setting out the amount of Product required, the date for Delivery and the Delivery address. The remaining twenty-four (24) months of the Forecast Schedule shall be, on a rolling, non-binding basis.

6.2

At the latest twelve (12) months before the actual delivery of Product, IMMUCELL shall submit to LONZA a firm purchase order (“Firm Purchase Order”) by facsimile or in any other written or electronic form, setting out, including but not limited, the quantity of Product required, quality standard, the date for delivery and the delivery address. In the event that a Firm Purchase Order has to be changed on IMMUCELL’s demand, LONZA has to be informed in writing and full cost compensation of such change has to be carried by IMMUCELL.

6.3

LONZA shall confirm the delivery date(s) and quantity of Product to be delivered as set out in each Firm Purchase Order within ten (10) business days of receipt from IMMUCELL. Upon confirmation, each Firm Purchase Order will be regarded by the parties as a binding irrevocable commitment by LONZA to manufacture and to deliver to IMMUCELL the relevant quantity of Product according to the requirements set out in such Firm Purchase Order.

6.4

Product shall be delivered FCA (Free Carrier) the Facility (as defined by Incoterms 2000) which means (a) Lonza delivers Product, cleared for export, to the carrier nominated by IMMUCELL at the Facility and loaded onto the nominated carrier’s collecting vehicle (“Deliver,” “Delivery,” or “Delivered,” as appropriate), (b) risk and title to Product pass to IMMUCELL upon Delivery. At the time of Delivery, LONZA shall provide IMMUCELL by email or facsimile transmission with a Certificate of Analysis for each Product Delivery, and LONZA shall also ship a Product sample (with sample size to be specified by IMMUCELL) to IMMUCELL (at IMMUCELL’s address specified on page 1 of this Agreement). Subject to Clause 6.3, LONZA shall deliver to IMMUCELL the Certificate of Analysis not later than the date of Delivery. Transportation of Product and samples, whether or not under any arrangements made by LONZA on behalf of IMMUCELL, shall be made at the sole risk and expense of IMMUCELL.

6.5

At IMMUCELL’s request, LONZA will Deliver Product in quarantine prior to delivery of the Certificate of Analysis. Such request shall be accompanied by IMMUCELL’s written acknowledgement that the Product has been Delivered without the transmittal to IMMUCELL of a Certificate of Analysis, that accordingly the Product cannot be administered to animals until transmittal of the Certificate of Analysis and that IMMUCELL nevertheless accepts full risk of loss, title and ownership of the Product. The Delivery of Product in quarantine shall be subject to such testing requirements as LONZA may reasonably require (but no more than the agreed upon release testing package set forth in Schedule 1), and the xxxxxxxxxxxxxxxxxxx period referred to in Clause 6.11 shall run from Delivery in quarantine of the Product to IMMUCELL.

6.6

Unless otherwise agreed, LONZA shall package and label Product for Delivery in accordance with the packaging Specifications set forth in Schedule 1. It shall be the responsibility of IMMUCELL to inform LONZA in writing in advance of any special packaging and labelling requirements for Product. All additional costs and expenses of whatever nature incurred by LONZA in complying with such special requirements shall be charged to IMMUCELL in addition to the Price.

6.9	IMMUCELL shall diligently examine the Product as soon as practicable after receipt. Notice of all claims (time being of the essence) arising out of:

(a)

visible damage to or total or partial loss of Product in transit shall be given in writing to LONZA and the carrier within xxxxxxxxxxxxxxxxxxxxxx of receipt by IMMUCELL; or

(b)

non-Delivery shall be given in writing to LONZA within xxxxxxxxxxxxx after the date of LONZA’s dispatch notice.

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6.10

IMMUCELL shall make damaged Product and associated packaging materials available for inspection and shall comply with the requirements of any insurance policy covering the Product notified by LONZA to IMMUCELL. LONZA shall offer IMMUCELL all reasonable assistance (at the cost and expense of IMMUCELL) in pursuing any claims arising out of the transportation of Product.

6.11

Promptly following receipt of Product or any sample thereof, IMMUCELL may carry out any of the tests outlined or referred to in the Specification set out in Schedule 1. Subject to Clause 2.2, if such tests show that the Product fails to meet Specification or was not manufactured in accordance with the requirements of cGMP, IMMUCELL shall give LONZA written notice thereof within xxxxxxxxxxxxxxxxxxxx from the date of IMMUCELL’s actual receipt of the Product and shall return such Product to LONZA’s premises for further testing. In the absence of such written notice Product shall be deemed to have been accepted by IMMUCELL as meeting Specification and the requirements of cGMP. Subject to Clause 2.2, if IMMUCELL has reasonably demonstrated to LONZA that Product returned to LONZA fails to meet Specification and/or the requirements of cGMP and that such failure is not due (in whole or in part) to acts or omissions of IMMUCELL or any third party after Delivery, LONZA shall, at IMMUCELL’s discretion, refund that part of the Price that relates to the production of such Product or replace such Product at its own cost and expense. In the event IMMUCELL requires LONZA to replace such Product, LONZA shall use all reasonable endeavors to do so with the minimum delay having regard to its commitments to third parties in the timing of such replacement.

6.12

Subject to Clause 2.2, if there is any dispute concerning whether Product returned to LONZA fails to meet Specification or whether such failure is due (in whole or in part) to acts or omissions of IMMUCELL or any third party after Delivery, such dispute shall be referred for decision to an independent expert (acting as an expert and not as an arbitrator) to be appointed by agreement between LONZA and IMMUCELL or, in the absence of agreement by the President for the time being of the Association of the Swiss Pharmaceutical Industry. If the expert determines that the Product is off Specifications due to a fault or omission by LONZA, the costs of such independent expert shall be borne by LONZA. If the failure to meet the Specifications is not due to a fault or omission by LONZA, the cost of such independent expert shall be borne by IMMUCELL. The decision of such independent expert shall be in writing and, save for manifest error on the face of the decision, shall be binding on both LONZA and IMMUCELL.

6.13	The provisions of Clauses 6.11 and 6.12 shall be the sole remedy available to IMMUCELL in respect of Product that fails to meet Specification.

7.	Price and Terms of Payment

7.1

IMMUCELL shall pay the Price set out in Schedule 3 for provision of Services or purchase of Product that have been authorized by a purchase order issued by IMMUCELL pursuant to this Agreement, together with any additional costs and expenses that fall due under this Agreement in accordance with the Terms of Payment.

7.2	Prices for the Services provided by LONZA are based on the assumptions and information laid out in Schedule 2. If there is a significant deviation in the amount of Services to be provided by LONZA, the parties will enter good-faith negotiations regarding any price changes.

7.3	Unless otherwise indicated in writing by LONZA, all prices and charges are exclusive of Value Added Tax or of any other applicable taxes, levies, imposts, duties and fees of whatever

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nature imposed by or under the authority of any government or public authority, which shall be paid by IMMUCELL (other than taxes on LONZA’s income). All invoices are strictly net and payment must be made within xxxxxxxxxxxxxxxx of date of invoice. Payment shall be made without deduction, deferment, set-off, lien or counterclaim of any nature.

7.4

It is understood and acknowledged by LONZA and IMMUCELL that Services described in Schedule 2 (specifically Stages 2, 4, 5, 6, 7, 8 and 9) shall only commence upon the issuance of a written purchase order by IMMUCELL that authorizes LONZA to proceed with the Services described in each Stage (specifically Stages 2, 4, 5, 6, 7, 8 and 9) included in Schedule 2. IMMUCELL and LONZA acknowledge and agree that the terms and conditions that may be included in any IMMUCELL purchase order shall not apply and that the terms and conditions of this Agreement shall control. LONZA and IMMUCELL acknowledge that Stages 1 and 3 commenced on xxxxxxxxxxxxxxxxx pursuant to IMMUCELL Purchase Order No. D4986 and that IMMUCELL paid LONZA xxxxxxxxxxxxxxunder LONZA Invoice No. 5132 for the Services provided by Lonza in Stages 1 and 3.

7.5

For each deliverable specified in the Services as provided in Schedule 2, Stages 2.1, 2.2, 2.3, 5 and 6, IMMUCELL shall pay to LONZA the milestone payment amount corresponding to such deliverable, as set forth in the Schedule 3 as follows: xxxxxx xxxxxxxxxx xxxx of each milestone payment shall be due and payable after issuance of a written purchase order by IMMUCELL and receipt by IMMUCELL of an invoice from LONZA for xxxx xxxxxxxx xxxxxxx of the applicable milestone payment, and xxxxxx xxxxxxxx xxxxxxxxxxx xxxxxxxx of the applicable milestone payment shall be due and payable upon completion of the applicable deliverable. No milestone payment shall be contingent upon xxxxxxx xxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxx. After issuance of a written purchase order for Engineering Batches (Stage 7), Validation Batches (Stage 8) and Commercial Batches (Stage 9) of Product as applicable, IMMUCELL shall pay xxxxxxxxx xxxxxxxxxx of the price for each Batch as defined in Schedule 3 upon xxxxxx xxxxxxxxxxx xxxxxxxxx and after receipt by IMMUCELL of an invoice from LONZA for xxxxx xxxxx xxxxxxxxx of the price for each batch as defined in Schedule 3, and the xxxxxx xxxxxxx xxxxxxxxxx xxxxxx of the price for each Batch as defined in Schedule 3 shall be due and payable upon xxxxxxxx. Payment of each such invoice shall be due and owing within xxxxxxx of the invoice date. IMMUCELL agrees that, for the Term of this Agreement, LONZA shall exclusively manufacture 100% of IMMUCELL’s Commercial Batches of Product (“Exclusivity Obligation”). If IMMUCELL issues a purchase order covering the Validation Batches (Stage 8), LONZA agrees to reserve time in the Facility for xxxxxxxxxxxxx xxxxxxxxxxx xxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxxI If LONZA is unable to accept a written purchase order from IMMUCELL that was submitted in accordance with Section 6 xxxxx then IMMUCELL shall be released from the Exclusivity Obligation and may seek alternate sources for Product. In such negotiations with an alternate vendor, IMMUCELL will make a good faith effort to xxxxxxx xxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxxxx If LONZA is unable to accept a written purchase order from IMMUCELL that was submitted in accordance with Section 6 xxxxxx xxxxx xxxxxxxx xxxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxx, then IMMUCELL and LONZA will negotiate in good faith an allocation of production between an amount held exclusively for Lonza and an excess to be obtained from alternate sources for Product.

7.6	In default of payment on due date:

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(a)

interest shall accrue on any amount overdue at the annual rate of xxxxxxxxxxxxxxxxxxxx, with interest calculated based on the number of days that payment is delinquent; and

(b)

LONZA shall, at its sole discretion, and without prejudice to any other of its accrued rights, be entitled to suspend the provision of the Services or to treat this Agreement as repudiated on not less than xxxxxxxxxxxxxxxxxxxxxx prior notice in writing to IMMUCELL given at any time thereafter.

8.	Warranties and Indemnification

8.1	LONZA warrants that:

(a)

the Services shall be performed in accordance with the terms and conditions of this Agreement, including, without limitation, Clauses 2.1 and 2.2;

(b)

as of the date of this Agreement the LONZA Know-How and/or Intellectual Property are owned by LONZA or LONZA is otherwise entitled to use them for the purposes of providing Services under this Agreement and during the term of this Agreement LONZA shall not do or cause anything to be done which would adversely affect their ownership or entitlement to use the same for those purposes;

(c)

LONZA has the necessary corporate authorizations to enter into this Agreement,;

(d)

as of the date of this Agreement to the best of LONZA’s knowledge and belief, the use by LONZA of the LONZA Know-How and the LONZA Intellectual Property (excluding any modifications or steps made or developed by IMMUCELL, IMMUCELL Materials, Information and/or Intellectual Property) and LONZA Know-How and/or Intellectual Property for the performance of the Services as provided herein will not infringe any rights (including without limitation any intellectual or industrial property rights) vested in any third party; and

(e)

LONZA will notify IMMUCELL in writing immediately if it receives or is notified of a claim from a third party that the use by LONZA of the LONZA Know-How and/or Intellectual Property for Services infringes any intellectual property rights vested in such third party.

8.2	IMMUCELL warrants that:

(a)

IMMUCELL has and shall at all times throughout the term of this Agreement have the right to supply the Production Strain, the other IMMUCELL Materials and IMMUCELL Information to LONZA and the necessary rights to permit LONZA to use the same for the purpose of the Services;

(b)

IMMUCELL has the necessary corporate authorizations to enter into this Agreement;

(c)

any of the Production Strain, the other IMMUCELL Materials, Information and/or Intellectual Property not owned by IMMUCELL are licensed to IMMUCELL under a license which will permit their use by LONZA to perform the Services;

(d)

to the best of IMMUCELL’s knowledge and belief, the use by LONZA of the Production Strain, other IMMUCELL Materials, Information and/or Intellectual Property for the

ImmuCell Corporation

Services (including without limitation the manufacture of the Product) will not infringe any intellectual property rights of any third party; and

(e)

IMMUCELL will promptly notify LONZA in writing if it receives or is notified of a claim from a third party that the Production Stain, other IMMUCELL Materials, Information and/or Intellectual Property or that the use by LONZA thereof for the provision of the Services infringes any intellectual property rights of such third party.

8.3

Disclaimer : THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, AND, EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL OTHER WARRANTIES, BOTH EXPRESS AND IMPLIED, ARE EXPRESSLY DISCLAIMED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

8.4

Indemnification by LONZA : Subject to Clauses 8.6, 8.7 and 8.8 below, LONZA shall defend, indemnify and hold harmless each of IMMUCELL and its directors, officers, and employees and the successors and assigns of any of the foregoing (each a “IMMUCELL Indemnitee”) from and against any loss, damage, costs and expenses (including court costs and legal fees on a full indemnity basis) that IMMUCELL may suffer arising directly out of any breach of the warranties given by LONZA in clause 8.1 above or any claims alleging that LONZA’s sole use of LONZA Know-How (excluding use of LONZA Know-How with IMMUCELL Materials or IMMUCELL Information) infringes any rights (including without limitation any intellectual property rights) vested in a third party (whether or not LONZA knows or should have known the same) provided that there shall be excluded from this indemnity all IMMUCELL revenue.

8.5

Indemnification by IMMUCELL : Subject to Clauses 8.6 and 8.7 below, IMMUCELL shall defend, indemnify and hold harmless each of LONZA and its directors, officers, and employees and the successors and assigns of any of the foregoing (each a “LONZA Indemnitee”) from and against any loss, damage, costs and expenses of any nature (including court costs and legal fees on a full indemnity basis), that LONZA may suffer arising directly out of any breach of the warranties given by IMMUCELL in clause 8.2 above or any claims alleging LONZA’s use of the Production Strain, IMMUCELL Materials or IMMUCELL Information infringes any rights (including, without limitation, any intellectual property rights) vested in any third party (whether or not IMMUCELL knows or should have known about the same) provided that there shall be excluded from this indemnity all LONZA actual or potential revenues other than those which are an integral part of any Price or fees which IMMUCELL is obliged to pay to LONZA under this Agreement. IMMUCELL shall further indemnify and maintain LONZA Indemnitees against all claims, actions, costs, expenses (including court costs and legal fees on a full indemnity basis) or other liabilities whatsoever in respect of:

(a)

any product liability in respect of Product, unless such liability is caused by the negligent act or omission of LONZA in the production and/or supply of Product; and

(b)

any negligent or willful act or omission of IMMUCELL in relation to the use, processing, storage or sale of the Product.

8.6

Indemnification Procedure : If a LONZA Indemnitee or a IMMUCELL Indemnitee (the “Indemnitee”) intends to claim indemnification under this Clause 8, it shall promptly notify the other party (the “Indemnitor”) in writing of such alleged liability. The Indemnitor shall have the right to control the defense thereof with counsel of its choice as long as such counsel is reasonably acceptable to Indemnitee; provided, however, that any Indemnitee shall have the right to retain its own counsel at its own expense, for any reason, including if representation of any Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual

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or potential differing interests between such Indemnitee and any other party reasonably represented by such counsel in such proceeding. The Indemnitee, its employees and agents, shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any liability covered by this Clause 8. The obligations of this Clause 8.6 shall not apply to amounts paid in settlement of any claim, demand, action or other proceeding if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve the Indemnitor of any obligation to the Indemnitee under this Clause 8. It is understood that only LONZA or IMMUCELL may claim indemnity under this Clause 8 (on its own behalf or on behalf of its Indemnitees), and other indemnitees may not directly claim indemnity hereunder.

8.7

Disclaimer of Consequential Damages : Subject to the second sentence of this Clause 8.7, in no event shall either party be liable to the other party for incidental, indirect, special, punitive or consequential damages arising from or related to breach of this Agreement. The foregoing disclaimer of damages shall not apply in the case of breach of Clause 9 (Confidentiality), or grossly negligent or intentionally wrongful acts or omissions.

8.8

Limitation of Liability : Subject to Clause 8.7 and to the second sentence of this Clause 8.8, in no event shall LONZA’s liability to IMMUCELL for direct damages arising from or related to breach of this Agreement exceed xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. The foregoing limitation of liability shall not apply in the case of breach of Clause 9 (Confidentiality), or grossly negligent or intentionally wrongful acts or omissions.

9.	Confidentiality

9.1

IMMUCELL acknowledges that LONZA Know-How and LONZA acknowledges that IMMUCELL Information, IMMUCELL Intellectual Property and IMMUCELL Materials with which it is supplied by the other pursuant to the Agreement, is supplied, subject to Clause 9.5, in circumstances imparting an obligation of confidence and each agrees to keep such LONZA Know-How or such IMMUCELL Information secret and confidential and to respect the other’s proprietary rights therein and not at any time for any reason whatsoever to disclose or permit such LONZA Know-How or such IMMUCELL Information, IMMUCELL Intellectual Property and IMMUCELL Materials to be disclosed to any third party save as expressly provided herein, nor to use such Information for any other purpose than the performance of this Agreement.

9.2

IMMUCELL and LONZA shall each procure that all their respective employees, consultants, contractors and persons for whom it is responsible having access to LONZA Know-How or IMMUCELL Information, IMMUCELL Intellectual Property and IMMUCELL Materials shall be subject to the same obligations of confidence as the principals pursuant to Clauses 9.1 and 9.3 and shall be bound by secrecy agreements in support of such obligations.

9.3

LONZA and IMMUCELL each undertake not to disclose or permit to be disclosed to any third party (including any contractors or consultants not previously approved in writing by LONZA, such approval not to be unreasonably withheld or delayed), or otherwise make use of or permit to be made use of (a) any trade secrets or confidential information relating to the technology, business affairs or finances of the other, any subsidiary, holding company or subsidiary or any such holding company of the other, or of any suppliers, agents, distributors or licensees of the other which comes into its possession under this Agreement or (b) the commercial terms of this Agreement except to the extent that the same is required to be disclosed pursuant to subpoena,

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court order, judicial process or otherwise by law, provided the receiving party provides prompt notice to the disclosing party of such requirement in order to give the disclosing party an opportunity to timely seek a protective order or other appropriate judicial relief. In the event the disclosing party is unable to obtain a protective order or other appropriate judicial relief, the receiving party shall disclose only that portion of the disclosing party’s confidential information which is legally required to be disclosed, and ensure that all such confidential information of the disclosing party shall be redacted to the fullest extent permitted by law prior to such disclosure and that the disclosing party shall be given an opportunity to review the confidential information prior to its disclosure.

9.4	The obligations of confidence referred to in this Clause 9 shall not extend to any information which:

(a)

is or becomes generally available to the public otherwise than by reason of a breach by the receiving party of the provisions of this Clause 9;

(b)

is known to the receiving party and is at its free disposal prior to its receipt from the disclosing party;

(c)

is subsequently disclosed to the receiving party without being made subject to an obligation of confidence by a third party;

(d)

LONZA or IMMUCELL may be required to disclose under any statutory, regulatory or similar legislative requirement, subject to the imposition of obligations of secrecy wherever possible in that relation; or

(e)

is developed by any servant or agent of the receiving party without access to or use or knowledge of the information by the disclosing party.

9.5	The parties acknowledge that:

(a)

without prejudice to any other rights and remedies that the parties may have, the parties agree that the LONZA Know-How and IMMUCELL Information, IMMUCELL Intellectual Property and IMMUCELL Materials is valuable and that damages may not be an adequate remedy for any breach of the provisions of this Clause 9. The parties agree that the relevant party will be entitled without proof of special damage to seek the remedies of an injunction and other equitable relief for any actual or threatened breach by the other party;

(b)

save as provided herein LONZA shall not at any time have any right, title, license or interest in or to IMMUCELL Materials, Information and/or Intellectual Property or any other intellectual property rights vested in IMMUCELL or to which IMMUCELL is entitled; and

(c)

IMMUCELL shall not at any time have any right, title, license or interest in or to LONZA Know-How and/or LONZA Intellectual Property or any other intellectual property rights which are vested in LONZA or to which LONZA is otherwise entitled.

10.

Coming into Force, Termination

10.1	This Agreement shall come into force on the Effective Date and will remain in full force, unless or until terminated according to the terms of this Agreement; this Agreement shall terminate in

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the event that IMMUCELL elects not to submit a purchase order as provided herein and provides written notice to that effect to LONZA; provided, xxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxx xxxx xxx xxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxx xxxxxxxxx xxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxxxx xxxxxxxx xxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxxx (collectively the “Term”).

10.2

If it becomes apparent to either LONZA or IMMUCELL at any stage in the provision of the Services that it will not be possible to complete the Services for scientific or technical reasons, a xxxxxxxxxx period shall be allowed for good faith discussion and attempts to resolve such problems. If such problems are not resolved within such period, LONZA and IMMUCELL shall each have the right to terminate the Agreement with immediate effect by giving to the other party notice in writing. In the event of such termination, IMMUCELL shall pay to LONZA a termination sum calculated by reference to all the Services performed by LONZA prior to such termination (including a pro rata proportion of the Price for any stage of the Services which is in process at the date of termination) and all expenses and uncancellable costs which, despite LONZA’s commercially reasonable best efforts, Lonza could not avoid the reasonable incurrence thereof in giving effect to such termination (including the costs of terminating any commitments entered into under the Agreement, such termination sum not to exceed the Price). If LONZA is in material breach of this Agreement and fails to cure such material breach in accordance with the provisions of Section 10.4 below, IMMUCELL shall have the right to terminate this Agreement upon xxxxxxxxxxxxxxxx prior written notice and, in such event, IMMUCELL may seek alternate sources for Product.

10.3	For the avoidance of doubt, activities relating to fermentation shall be deemed to commence with the date of removal of the vial of cells from frozen storage for the performance of the fermentation (“Commencement”).

10.4	The parties may each terminate the Agreement with immediate effect by notice in writing to the other party upon the occurrence of any of the following events:

(a)

if the other commits a material breach of the Agreement (which shall include a breach of the warranties set out in Clause 8 above) which in the case of a breach capable of remedy is not remedied within thirty (30) days of the receipt by the other of notice identifying the breach and requiring its remedy; provided, however, that such additional thirty (30) day cure period shall not apply to any failure to make payment when due; or

(b)

if the other ceases for any reason to carry on business or compounds with or convenes a meeting of its creditors or has a receiver or manager appointed in respect of all or any part of its assets or is the subject of an application for an administration order or of any proposal for a voluntary arrangement or enters into liquidation (whether compulsorily or voluntarily) or undergoes any analogous act or proceedings under foreign law.

10.5	Upon the termination of the Agreement for whatever reason:

(a)

LONZA shall promptly return to IMMUCELL all IMMUCELL Information and IMMUCELL Intellectual Property and shall dispose of or return to IMMUCELL Materials (and where supplied by IMMUCELL the Production Strain) and any materials therefrom, as directed by IMMUCELL, and LONZA shall not thereafter use or exploit the IMMUCELL Information, IMMUCELL Intellectual Property and IMMUCELL Materials in any manner whatsoever;

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(b)

IMMUCELL shall promptly return to LONZA all LONZA Know-How and LONZA Intellectual Property it has received from LONZA, and IMMUCELL shall not thereafter use or exploit the LONZA Know-How and/or Intellectual Property in any way whatsoever except as otherwise agreed upon in writing by LONZA and IMMUCELL;

(c)

LONZA and IMMUCELL shall do all such acts and things and shall sign and execute all such deeds and documents as the other may reasonably require to evidence compliance with this Clause 10.4.

10.6	Termination of this Agreement for whatever reason shall not affect the accrued rights of either LONZA or IMMUCELL arising under or out of this Agreement and all provisions which are expressed to survive the Agreement shall remain in full force and effect.

11.

Force Majeure

11.1

If LONZA is prevented or delayed in the performance of any of its obligations under the Agreement by Force Majeure and shall give written notice thereof to IMMUCELL specifying the matters constituting Force Majeure together with such evidence as LONZA reasonably can give and specifying the period for which it is estimated that such prevention or delay will continue, LONZA shall be excused from the performance or the punctual performance of such obligations as the case may be from the date of such notice for so long as such cause of prevention or delay shall continue provided that if such period of time exceeds one-hundred and eighty (180) days IMMUCELL may terminate the Agreement and be released from any obligations under firm purchase orders outstanding in accordance with Section 6.1 or Section 6.2 without further obligation to LONZA

11.2	The expression “Force Majeure” shall be deemed to include any cause affecting the performance by LONZA of the Agreement arising from or attributable to acts, events, acts of God, omissions or accidents beyond the reasonable control of LONZA.

12.

Governing Law, Interpretation, Jurisdiction and Enforceability

12.1

The construction, validity and performance of the Agreement shall be governed by the laws of the State of Delaware, USA without regard to any choice of law principle that would dictate the application of the law of another jurisdiction, and shall in no event be governed by The United Nations Convention on Contracts for the International Sale of Goods. The parties agree to try to amicably settle any dispute that may arise between the parties in relation to this Agreement pursuant to Section 12.3 of this Agreement. If no amicable settlement of any such dispute can be reached by the parties, the parties agree that they may pursue any and all remedies provided at law or in equity. This Agreement shall be interpreted in the English language and any differences in interpretation of the Agreement resulting from translation of the Agreement into a language other than the English language shall be of no effect.

12.2

No failure or delay on the part of either LONZA or IMMUCELL to exercise or enforce any rights conferred on it by the Agreement shall be construed or operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege or further exercise thereof operate so as to bar the exercise or enforcement thereof at any time or times thereafter.

12.3	Any disputes relating to issues arising from this Agreement shall, in the absence of resolution within thirty (30) days of the dispute arising, be referred to the Chief Executive Officers of IMMUCELL and LONZA, who shall discuss the matter and attempt to resolve it by mutual consent.

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12.4	Nothing in this Clause 12 shall prevent a party from exercising any right under this Agreement, including the right of termination under Clause 10 above.

13.

Notices

13.1	Any notice or other communication to be given under this Agreement shall be delivered personally or sent by facsimile transmission, or if facsimile transmission is not available, by first class pre-paid post addressed

13.2	All such notices or other communications shall be deemed to have been received as follows:

(a)

if delivered personally, at the time of such delivery;

(b)

if sent by facsimile, upon receipt of the transmission confirmation slip showing completion of the transmission;

(c)

if sent by first class pre-paid post, ten (10) business days (Saturdays, Sundays and Bank or other public holidays excluded) after being placed in the post.

14.

Illegality

14.1

If any provision or term of this Agreement or any part thereof shall become or be declared illegal, invalid or unenforceable for any reason whatsoever including but without limitation by reason of the provisions of any legislation or other provisions having the force of law or by reason of any decision of any Court or other body or authority having jurisdiction over the parties hereto:

(a)

such provision shall, so far as it is illegal, invalid or unenforceable, be given no effect by the Parties and shall be deemed not to be included in this Agreement;

(b)

the other provisions of this Agreement shall be binding on the Parties as if such provision was not included therein; and

(c)

the Parties agree to negotiate in good faith to amend such provision to the extent possible for incorporation herein in such reasonable manner as most closely achieves the intention of the Parties without rending such provision invalid or unenforceable.

15.

Miscellaneous

15.1

IMMUCELL shall obtain and maintain product liability insurance with a reputable and solvent insurance provider in the amount of at least Two Million Dollars (US) ($2,000,000.00 (US) per event or linked events. IMMUCELL shall ensure that LONZA’s interest shall be noted on the product liability insurance policy and IMMUCELL shall supply LONZA with a copy of such insurance policy on reasonable request and shall not terminate or amend (other than amending to increase the level of cover) such policy without prior written notice to LONZA.

15.2

Neither party shall be entitled to assign, transfer, charge or in any way make over the benefit and/or the burden of this Agreement without the prior written consent of the other which consent shall not be unreasonably withheld or delayed, save that either party shall be entitled without the prior written consent of the other party to assign, transfer, charge, sub-contract, deal with or in

ImmuCell Corporation

any other manner make over the benefit and/or burden of this Agreement to a successor of that party’s business by reason of merger, sale of all or substantially all of its assets or other form of acquisition.

15.3

Nothing herein shall be construed as releasing either party from any obligation that matured prior to the expiration or termination of this Agreement. The obligations of the parties under Clauses 2.6 (Restrictions on use of Production Strain, IMMUCELL Materials, IMMUCELL Information and IMMUCELL Intellectual Property), 4 (Licenses; Restrictions), 8 (Warranties and Indemnification), 9 (Confidentiality), and 10.4, 10.5 and 10.6 (consequences of termination) shall survive the termination of this Agreement for any reason.

15.4	The text of any press release or other communication to be published by or in the media concerning the subject matter of the Agreement shall require the prior written approval of LONZA and IMMUCELL.

15.5

The Agreement embodies the entire understanding of LONZA and IMMUCELL and there are no promises, terms, conditions or obligations, oral or written, expressed or implied, other than those contained in the Agreement. The terms of the Agreement shall supersede all previous agreements, including without limitation the Transfer and Evaluation Agreement, which may exist or have existed between LONZA and IMMUCELL relating to the Services.

15.6

No variation of or addition to this Agreement or any part thereof shall be effective unless in writing and signed on behalf of both parties. Notwithstanding the above the parties hereby confirm that amendments to the Specification shall be effective if reduced to writing and signed by the quality and/or regulatory representative of both parties, which quality and/or regulatory representative shall be nominated from time to time by each party.

[The next page is the signature page.]

ImmuCell Corporation

AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year first above written.


LONZA Sales Ltd		IMMUCELL

Basel, July 15,2010		Portland, July 15, 2010

Signature: /s/ Scott B. Waldman		Signature: /s/ Michael F. Brigham

———		Printed Name: Michael F. Brigham

Printed Name: Scott B. Waldman		Title: President & CEO

Title: Vice President and Secretary		Signature: /s/ Joseph H. Crabb

Signature: /s/ John McGrath		———

Printed Name: John McGrath		Printed Name: Joseph H. Crabb

Title: Senior VP and General Manager, Biological Operations		Title: Vice President & Chief Scientific Officer

ImmuCell Corporation

Schedule 1: Specifications

The work programme contains activities required prior to manufacture of a cGMP batch. Changes to the Specification may affect the activities, price and terms for the services.

(A) Packaging, storage and shipping specifications

(B) Specification for a master and working cell bank

For draft see Exhibit B

(C) Specification for bulk purified Product (cGMP)

For draft see Exhibit C

[TO BE AGREED UPON AND SET FORTH IN WRITING BY THE PARTIES SUBSEQUENT TO THE EFFECTIVE DATE]

ImmuCell Corporation

Schedule 2: Work program

(A) Supply of IMMUCELL Materials and IMMUCELL Technology

Prior to commencement of the Services at LONZA or, if appropriate, prior to the commencement of the relevant Stage of the Services, IMMUCELL shall supply LONZA with the following:

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xxxxx

IMMUCELL CORPORATION

(B) Activities to be Undertaken by LONZA


Stage 1		Technology transfer
Stage 2.1		Lab scale process
Stage 2.2		Reproduction/Scale-up
Stage 2.3		Process Limit Studies
Stage 3		Analytical Method Transfer/verification
Stage 4		Regulatory Support for first CMC Technical Section submission to FDA
Stage 5		Facility Adaptation
Stage 6		Preparation of cGMP documentation for Commercial Batches
Stage 7		Engineering Batches
Stage 8		Validation Batches
Stage 9		Commercial Campaign

ImmuCell Corporation

Stage 1: Technology Transfer

Objectives

1. To

transfer list of raw materials and suppliers.

2. To

transfer analytical methods used by IMMUCELL for in-process control and batch release.

3. To

transfer cGMP Working Cell Bank of production strain together with relevant documentation to LONZA according to cGMP.

4. To

transfer IMMUCELL’S fermentation processes for Nisin.

5. To

transfer IMMUCELL’S product harvesting and purification procedures for product.

6. To

define (LONZA) and approve (IMMUCELL) suitable quality and suppliers of raw materials and approve quality and suppliers of raw materials.

7. To

issue Quality Agreement.

8. To

issue Transfer Protocol.

Activities

xxxxxx xxxxx xxxxxx xxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxxx xxxx xxxxx xxxxxxx xxxxxxxx xxxxxxx xxxxxx

xx xxxxxx xxxxxxx xxxxxxxxx xxxxxx xxxxxxx.

xxxx xxxxxx xxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxxx xxxxxx xxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxxxxx.

xxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxx xxxxxxx

xxxxxxxxxxxxxxx xxxxxxxx xxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxx

xxxxxx xxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxx

xxxxxxx xxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxx

xxxxxx xxxxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxx

xxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxx xxxxxxxx

Timeline

Stage 1 commenced on xxxxxx xxxxx xxxxxx pursuant to IMMUCELL Purchase Order D4986. xxxx xxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxx xxxxxxxx xxxxxxx xxxxxxxx

Immucell Corporation

Stage 2: Lab Scale Process Reproduction and Scale-Up, Yield Reproduction Runs and Process Limit Studies

Objectives

To implement IMMUCELL’S fermentation process

To implement IMMUCELL’S isolation processes for production of Product

To adapt IMMUCELL’S process to LONZA’S production equipment.

To reproduce IMMUCELL’S quality of Product by LONZA adapted process.

To assess the requirements for plant or process adaptations for production at LONZA’s plants.

Perform Process limit studies.

Activities

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xxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xx xxxxx xxxx xxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxx x xxxxxxxxx xxxxxxxxx

xxx xxxxxxxx xx xxxx xx xxxx xxxx xxxx xxxxx xxxxx xx xx xxx xxx xx xxx xxxxxx xx xxx xxxx xxxxx xxxxx xxxxx

xxxxxx xxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxx

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ImmuCell Corporation

xxxxxxx xxxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxxx xxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx

Timeline

Stage 2 will not commence unless IMMUCELL issues a corresponding purchase order for such services. Stage 2 may commence as soon as the corresponding parts of the tech transfer have been completed and shall be completed with the issue of the final reports of activities.xxxxxx xxxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxxx xxxxxxxx xxxxxx xxxxx xxxxxx xxxxx xxxxxxx xxxxxxx xxxxxx xxxxxx xxxxxx xxxxxxx xxxxxx xxxxxxxx The scope of the process limit studies will be defined in a separate protocol which will be approved by both parties. The parties will work together in good faith to make portions of the data from Stage 2 available for this submission to the FDA as soon as possible.

ImmuCell Corporation

Stage 3: Analytical Method Transfer/Verification

Objectives

1. Transfer and verify all analytical/biochemical methods for cGMP batch release.

2. Transfer and verify analytical methods for in-process control.

Activities

xxxxxxx xxxxx xxxxxxx xxxxxx xxxxxx xxxxxx xxxxxxx xxxxxxx xxxxx xxxx xxxxx xxxxxxx xxxxxx xxxxxx xxxxxx xxxxxxx xxxxx xxxx xxxx xxxx xxxxxx xxxxxx xxxxxxx xxxxxxx xxxxxx xxxxxx

xxxxxx xxxxxx xxxxxx xxxxx xxxxxxx xxxx xxxxxx xxxxxx xxxxxxx xxxxxxx xxxxx xxxxx xxxxxxx xxxxxx xxxxxx xxxxxx xxxxxxx xxxxxxx xxxxxx xxxxxxx xxxxxxx xxxxxxxx xxxxxxxx xxxxxxxxx

xxxxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxx

Timeline

Stage 3 commenced on xxxx xxxxxxxx xxxxxx pursuant to IMMUCELL Purchase Order No. D4986.xxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxxxxxx xxxxxxx xxxxxx

ImmuCell Corporation

Stage 4: Regulatory Support for First CMC Technical Section Submisssion to FDA

Objective

To provide documentation for support of first regulatory submission of CMC Technical Section to FDA.

Activities

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xxxxxxx xxxxxx xxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx xxxxxxx xxxxxx xxxxxxx xxxxxxxx

xxxxxxx.xxxxxxxx xxxxxx xx xxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxx xxxxxxx xxxxxx xxxxxxxx xxxxxxx xxxxx

Note: LONZA’s costs for this work is included in the payments for Stage 2 and Stage 3. Any additional regulatory support that IMMUCELL requires that is not covered by Stage 6 such as filing with another agency beyond the FDA will be charged separately at a cost which will be agreed upon in advance by the Parties.

Timeline

Stage 4 will commence in conjunction with Stage 2. LONZA will aim to complete the regulatory work as soon as possible after receiving all the relevant data from these services, in anticipation of IMMUCELL requiring the earliest possible filing date. Stage 4 shall be complete upon submission of the regulatory documentation.

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ImmuCell Corporation

Stage 5: Facility Adaptation

Prior to commencement of Stages 6-9, facility adaptation will be required. xxxxxx xxxxxx xxxxxxx xxxxxx xxxxxxx xxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxx xxxxxxxx xxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxxxxx xxxxxx

Timeline

Stage 5 will not commence unless IMMUCELL issues a corresponding purchase order for such services. xxxxxx xxxxxxx xxxxxxx xxxxxxxxx xxxxxx xxxxxx xxxxxxxx xxxxxxx xxxxxxx xxxx xxxxxxx xxxxxx xxxxxxxx xxxxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxxxx xxxxxxx xxxxxxx xxxxxxxxx xxxx xxxxx xxxxxx xxxxxxx xxxxxxxx xxxxxxxxx xxxxx xxxxxxxx

ImmuCell Corporation

Stage 6: Preparation of cGMP documentation for Commercial Batches

Objective

To prepare cGMP documentation for use in cGMP manufacture of Product.

Activities

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xxxxxxxxx xxxxxxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxx xxxxxxxxx xxxx xxxxxxx xxxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxx xxxxxxxxx

xxxxxxxx xxxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxxxxx xxxxxxxxxx xxxxx xxxxxxxxx xxxxx xxxxxxx xxxxxx xxxxxx xxxxxxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxxxx xxxxxxxxx xxxxxxxx

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Timeline

Stage 6 will not commence unless IMMUCELL issues a corresponding purchase order for such services. Stage 6 may commence as soon as suitable information is available. Stage 6 shall be complete when IMMUCELL is notified by LONZA that the documentation has been approved by LONZA’S Quality Department and the copy of the issued GMP Product specification has been sent to IMMUCELL.

xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxx xxxxxxxxxx xxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxx xxxxxxxxxxxxx xxxxxxxx

ImmuCell Corporation

Stage 7: Engineering Batches

Objectives

To scale-up and reproduce the Process on production scale

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Activities

Timeline

Stage 7 will not commence unless IMMUCELL issues a corresponding purchase order for such services. Stage 7 may commence as soon as the yield reproduction studies on lab scale are successfully accomplished (as mutually determined by the parties) and designated plant adaptation is completed (validation and qualification of equipment is accomplished).

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ImmuCell Corporation

Stage 8: Validation Batches

Objectives

Manufacture and release of Product from 3 cGMP Validation Batches xxxxx xxxxxxx xxxxxxxxxxx xxxxxxxxx xxxxxxxxx Liter nominal volume tank. Three (3) Validation batches are required.

Activities

Timeline

Stage 8 will not commence unless IMMUCELL issues a corresponding purchase order for such services. Stage 8 may commence following successful completion of the Engineering Batches based upon criteria mutually agreed upon in advance by the parties. Also the batch documents will be refined and finalized with the knowledge gained during the Engineering Batches

The batches shall be complete upon disposition of Product by LONZA’S Quality department.

xxxxx xxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxx xxxx xxxxxxx xxxxxxxx xxxxxxx xxxxxxxxx xxxxxxxxxxxxxxxxxxx If IMMUCELL requests in writing, the Product can be shipped in quarantine prior to release.

ImmuCell Corporation

Stage 9: Commercial Campaign

Objectives

Manufacture and release of Product from Commercial Batches xxxxxxxxxx xxxxxxxxxx xxxxxx xxxxx xxxx xxxxxxx xxxxx xxxxxxxxxxxx xxxxxx xxxxxxx xx Liter actual volume in a xxxxxx Liter nominal volume tank. IMMUCELL to specify the actual volume level between xxxxxxxxxxxxxxxx liters. xxxxx xxxxxxxx xxxxxxxx xxxxxxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxx xxxxxxxx xxxxx xxxxxxx xxxxxxxx xxxxxxx xxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxx x xxxxxxx xxx xxxxx xxx xxxxx xxxxx xxxxxxxx xxxxxx xxxxxx xxxxxx xxxxx xxx xxx xxx xxxxxxx xxxxxxx xxxxxxx

Activities

Timeline

Stage 9 will not commence unless IMMUCELL issues a corresponding purchase order for such services. Stage 9 may commence as soon as the corresponding Engineering Batches and Validation Batches have been finalized at every stage and documentation is ready.

The batches shall be complete upon disposition of Product by LONZA’S Quality department. It is estimated that Product will be delivered 1 month from commencement of Stage 9. If IMMUCELL requests in writing, the Product can be shipped in quarantine prior to release.

ImmuCell Corporation

Schedule 3: Price summary, terms and conditions


Stage	Description	Timeline (months)	Price (CHF)
1	Technology Transfer	x	xxxxxxx
2.1	Lab Scale Process Reproduction/Scale-Up	xxxx	xxxxxxx
2.2	Yield Reproduction Runs	x	xxxxxxx
2.3	Process Limit Studies	x	xxx
3	Analytical Method Transfer/Verification	xxx	xxxxxxx
			Included in prices for
4	Regulatory support for first CMC Technical Section Submission	x	Stage 2 and 3
5	Facility Adaptation	xxx	xxxxxxx
6	Preparation of cGMP Documentation for Commercial Batches	x	xxxxxx
7	Engineering Batch Price	xxx	xxxxxxxxxxx
8	Validation Batch Price	xxx	xxxxxxxx
9	Commercial Batch Price	x	^xxxxxxxx

1) Work initiated under Immucell PO # D4986.

2) IMMUCELL may order one (1) or two (2) Engineering Batches for Stage 7.

3) A campaign of 3 Process Validation Batches is currently planned for Stage 8.

xxxxxxxx xxxxxxx xxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxx xxxxxxxxxxx xxxxxxxxxxx xxxxxxxxxx xxxxxx xxxx xxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxx xxxxx xxxxxxxxxxx xxxxxx xxxxxxxxx xx xxxxxxxxxx xxxxx xxxxxxx xxx xxxxxxxxxxx xxxxxx xxx xxx xxxxx xxxxxx xx xxxxx xxxxx xxx xxxx xxxxxxx xxxx xxx xxxxxx xx xxxx xxxxx xxxx xxxxxxxxxxx xxxxxx xxxxxxxx xxxxxx xxxxx xxxxxx xxxxxxxx xxxxxxxx xxx xxxxxx xxxxxxxx xxxx xxx xxxxxx xxxxxxx xxxxxxx xx xxx x xxx xxxx xxxxxx xxxx xxxx xxxxxx xxxxxx xxxxxx xxxxx xxxxx xxxxx xxxxxx xxxxxx xxxx xxxxx xxxx xxxxxx xxxx xxxx xxxx xxxx xxxxx xxxxx xxxxxx xxxx xxx xxxxx xxxxxxxxx xxxx xxxxxxxx xxxxxx xx xxxxx xxxx xxxx xxxxxx xxxx xxxx xxxxx xxx xxxx xx xxxx xxxxxx xxx xxx xx xxxxx xxx xxxxxx xxxx xxxx xxxx xxxxx xx xxxxx xxx xxxx xxxx xxxx xxx xxx xxx xxxx xxxxx xxxx xxx xxx xxx xx xxx xxxx xx xx xxxx xxx xxxxxx xxxx xxx xxx xx xxx xxxxxx xx xxxx xxx xxxxxx xxxx xxxx xxxxxxx xxxxx xxxxx xxxxx xxxxxxxxxx xxx xxxx xxxxx xxxxx xxxx xxxxx xxxxx xxxxx xxxxxxxxx

5) Process limit studies will be ordered by a separate PO based on approval of process limit protocol and corresponding price for that scope of work. Basic price is CHF xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

All prices exclude the following:

—

Raw material, consumable costs charged at cost plus a xx handling fee.xxxxxx xxxx xx xxxx xxx xxx xxxxx xxxx xxxxxx xxxx xxxxx xxxx xxxxx xxxxx xxx xxx xxxx xxxx xxxxxx xxx xxxx xxxxx xxxxx xxxx xxxxxxxx xxx xxx xxxxxxx xxxxxxxx xxxxxxxx xx xxxx xxxxxx

ImmuCell Corporation

xxx xxx xxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxxxx xxxxx xxxxxx xxxx xxxx xxxxxx xxx xxxx xxxxx xxxx xxxxl xxx xxxx xxxx xxxx xxxxx xxx xxxxx xxxx xxx

—

xxx xxx xxxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxxx xxx xxxx xxxx xxxx xx xxx xxxxx xxxx xxxx xxxxx xxxxx xxxx xxx xxxx xxxxx xxxxx xxxxx xxx xxxx xxx xxx xxxxx xxxx xxxx xxxx xxxx xxxx xxxxx

x Consumables for R&D activities and QC testing during full scale production charged at cost plus a xx handling fee. xxxxx xxxx xxxx xxx xxxxx xxxxxx xxx xxxx xxx xxxx xxxxxx x xxxxxx xxx xxxx xxx xxxx xxx xxx xxxx xx xxx xxxxxx xxxxx xxxxx xxxx xx xxxx xxxx xxxx xxx xxxx xxxxx xxxx xxxxxxx xxxxx xx xxxxx xxxxx xxx xxxxx xxx xxxxx xxxx xx xxx xx xxxx xx xxxx xxx xxxx xx xxx xxx xxx xxxx xxx xxxx xx xxxx xxx xxxx xx xx xxx xxxx xx x xxx xx xx xxx xxxxx xx xxx xxxxx xxxxx xx xxx xxxx xxxx xx xxxxxx xxx xxx xxx xxx xxxx xxx xxx xxxx xxxx xxx xxx xxxxx xxxx xxx xxx xxxx xxx xxxx xxx xx xxx xxx xxxx xx xx xx xxx xx xx xxxx xxxx xxx xxx xxx xx xxxx xxx xxxx xxxxx

—

Cost from external laboratories will be passed through customer with a xxxxxxxxxxxxx fee for sample preparation, result processing and review.

—

Shipment, insurance, duties and taxes where applicable.

ImmuCell Corporation

EXHIBIT A

U.S. Patent No. 6,794,181, Method of Purifying Lantibiotics.

U.S. Patent No. 5,763,395, Stabilized Lanthionine Bacteriocin Composition.

ImmuCell Corporation

EXHIBIT B

Draft Specifications for a master and working cell bank (from Schedule 1-B)

Master Cell Bank (70-001S)


xx xxx xxx xxx xx xx xx xxx xxx xxx xxx xxx xxx xxx xxx xxx xx
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xxxxxxxxxxxxxxxxxx		xxxxxxxxxxxxxxxxxxxxx


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xxxxxxxxxxxxxe	xxxxxxxxxxxxx	xxxxxxxxxxx	xxxxxxxxl	xxxxxxxxxxxxe
xxxxxxxxxxxxxxxx	xxxxxxxxxxxxxxxxx	xxxxxx
xxxxxxxxxxxxxx	xxxxxxxxx xxxxxxxx	xxxxxx
xxxxxxxxxxx	xxxxxxxxxx	xxxxxx
xxxxxxxxxxxxxx xxxxxxxxxxxx xxxxxx	xxxxxxxx	xxxxxx
xxxxxxxxxxxx xxxxxx	xxxxxxxx	xxxxxxxxxxxxx xxxxxxxxxxxxxxx
xxxxxxxxxxxxx xxxxxxxxxx	xxxxxxxxxxxxxxxxxx	xxxxxxxxxx xxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxx xxxxxxxxxxxxx	xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxx	xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxx	xxxxxxxx	xxxxx

ImmuCell Corporation

EXHIBIT B (continued)

Working Cell Bank (Part #70-004)


xx xxx xxx xxx xx xx xx xxx xxx xxx xxx xxx xxx xxx xxx xxx xx
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xxxxxxxxxxxxxxxxxx		xxxxxxxxxxxxxxxxxxxxx


xxxxxxxx
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xxxxxxxxxxxxxe	xxxxxxxxxxxxx	xxxxxxxxxxx	xxxxxxxx	xxxxxxxxxxxx
xxxxxxxxxxxxxxxx	xxxxxxxxxxxxxxxxx	xxxxxx
xxxxxxxxxxxxxx	xxxxxxxxx xxxxxxxx	xxxxxx
xxxxxxxxxxx	xxxxxxxxxx	xxxxxx
xxxxxxxxxxxxxx xxxxxxxxxxxx xxxxxx	xxxxxxxx	xxxxxx
xxxxxxxxxxxx xxxxxx	xxxxxxxx	xxxxxxxxxxxxx xxxxxxxxxxxxxxx
xxxxxxxxxxxxx xxxxxxxxxx	xxxxxxxxxxxxxxxxxx	xxxxxxxxxx xxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxx xxxxxxxxxxxxx	xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxx	xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxx	xxxxxxxx	xxxxx

ImmuCell Corporation

EXHIBIT C

Draft Specifications for bulk purified Product (cGMP) (from Schedule 1-C)


xxxxxxxxxxxxxx xx	xxxxxxxxxxxxx	xxxxxxxxxxx	xxxx xx	xxxxxxxx x	INITIAL S / DATE
xxxxxxxxxx	xxxxxxxxxxxx, xxx xxxxxxxxxxxx xxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxx xxxxxxxxx.	xxxxxx Ixxxxxxxxxxxxxxx

xxxxxxxxxxxxx x	xxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxx
xxxxxxxxxxxxx x	xxxxxxxxxxxxxxxxxxx xxxxxx xxxxxxxxxx xxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxx	xxxxxxxxxxxxxxx xxxxxxxxx xxxxxxxxxxxxxxx

xxxxxxxxxxxxx	xxxxxxxxxxxx

xxxxxxxxxxxxxxxxx xxxxxxxxxxxx	xxxxxxx	xxxxxxxxxxxxx xxxx xxxxx xxxxxxxxxxxxxxx

ImmuCell Corporation


xxxxxxxxxxxxxxxxx xxxx	xxx xxxxxxxxxxxxxxxxxxx	xxx xxxxxxxxxxxxx xxFlxxxxxxxxx xxxxx xxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx

xx	xxxxxxxxxxx	xxxxxxxx xxxxxxxxxxxxxx xxx

xxxxxxxxx	xxxxxxxxxxxxxxxxxxx xxxxxxxxxx.	xxxxxxxxxxxxxxt xxxxxxxxxx xxxxxxxxxxxxx xxx

xxxxxxxxx	xxxxxxxxxxxx xxxxxxxxxxxxxx xx xxxxxxxxxxxxx xxxxxxxx	xxxxxxxxxxxxx xxxx xxxxxxxxxxxx xxxx xxxxxxxxxxxxxx xxxxx xxxxxxxxxxxxxxx

EXHIBIT 10.2

ImmuCell Corporation

Commercial Promissory Note for $1,000,000 between the Company and TD Bank, N.A. dated August 13, 2010.

ImmuCell Corporation

COMMERCIAL

PROMISSORY NOTE


U.S. $1,000,000.00		Portland, Maine
		August 13, 2010

FOR VALUE RECEIVED, the undersigned, ImmuCell Corporation (the “ Borrower ”), having a mailing address of 56 Evergreen Drive, Portland, ME, promises to pay to the order of TD Bank, N.A. (together with its successors and assigns, the “ Lender ”), at its principal place of business at One Portland Square, P.O. Box 9540, Portland, Maine 04112-9540 the principal sum of One Million & 00/100 Dollars ($1,000,000.00) or so much thereof as may be advanced in accordance with the terms hereof.

RATE OF INTEREST :

For each day all or any part of the principal amount due hereunder shall remain outstanding, interest shall accrue on the outstanding and unpaid principal amount due hereunder at the following rates per annum (each a “ Rate of Interest ”) and shall be computed on the basis of actual days elapsed in a 360 day year:

2. The Rate of Interest shall be adjusted monthly, with each adjustment effective on the 13 ^th day of each month (each a “ Reset Date ”) in accordance with changes in said One Month LIBOR and the terms hereof. Each resulting change in the Rate of Interest shall become effective, without notice to Borrower (which notice is hereby expressly waived by Borrower and all endorsers, guarantors, and sureties).

3. “ LIBOR ” (London Interbank Offered Rate) means the rate of interest in U.S. Dollars (rounded upwards, at the Lender’s option, to the next 100th of one percent) equal to the British Bankers’ Association LIBOR (“ BBA LIBOR ”) for the equivalent interest period as published by Bloomberg (or such other commercially available source providing quotations of BBA LIBOR as designated by Lender from time to time) at approximately 11:00 A.M. (London time) two London Banking Days prior to the Reset Date; provided however, if more than one BBA LIBOR is specified, the applicable rate shall be the arithmetic mean of all such rates. “London Banking Day” means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London, England. If, for any reason, such rate is not available, the term LIBOR shall mean, with respect to any interest period, the rate of interest per annum determined by Lender to be the average rate per annum at which deposits in dollars are offered for such Interest Period by major banks in London, England at approximately 11:00 A.M. (London time) two London Banking Days prior to the Reset Date.

ImmuCell Corporation

period during which the Borrower shall be in default under any material provision hereof or there shall be a default under any other document guarantying, governing or securing this Note. The Default Rate shall apply following entry of any judgment hereon notwithstanding any otherwise applicable statutory rate.

MONTHLY PAYMENTS OF PRINCIPAL AND INTEREST :

Payments of principal and interest upon this Note shall be calculated and paid as follows:

1. Beginning on September 13, 2010 and continuing on the 13 ^th day of each successive month through, to and including the Maturity Date and payment in full, Borrower shall make monthly payments of principal as specified in the attached amortization schedule (which is intended to reflect a 15 year amortization schedule that commenced on the date hereof), together with accrued interest on the total principal amount of the loan outstanding.

2. Payments shall be applied first to costs and expenses of the Lender for which Borrower is responsible under the terms of this Note or any instrument securing this Note, then to interest, and the remainder to reduction of principal.

TERM AND MATURITY :

The term of the loan evidenced hereby shall be ten (10) years. Therefore, unless sooner accelerated, the Note shall mature on August 13, 2020 (the “ Maturity Date ”) at which time the entire principal balance of this Note (including costs and late fees), together with all interest thereon, shall be due and payable without further notice or demand.

PREPAYMENT PREMIUM :

The loan evidenced hereby may be prepaid in part or in full at any time without premium.

However, upon Borrower’s effective conversion of the Rate of Interest to a fixed rate pursuant to any ISDA interest rate swap agreement or other interest rate hedge agreement, any prepayment shall be subject to the terms of such a swap or hedge agreement, including any provisions relating to termination fees.

LATE CHARGES :

The Lender shall collect a “late charge” of six cents ($.06) for each one dollar of each payment due hereunder which is not paid within fifteen (15) days after the due date hereof. Acceptance by Lender of any late payment on one occasion shall not constitute a waiver by Lender of any defaults or of its right to insist on timely payments on any subsequent occasion.

ImmuCell Corporation

EVENTS OF DEFAULT; REMEDIES :

Each of the following shall constitute an “ Event of Default ” hereunder:

1. Borrower shall fail to pay any installment of principal and/or interest hereunder when due;

2. any default or breach of condition shall occur under other terms of this note or under the terms of any current or future guaranty, security agreements, loan agreements or mortgages governing, securing or relating to this note or any modifications, renewals, or extensions hereof, not cured within any applicable grace or cure period;

3. there shall be any default under any other obligation or note from Borrower to Lender of any kind or nature whatsoever, whether now existing or hereafter arising, continuing after the expiration of any applicable grace or cure period;

4. the dissolution, liquidation or cessation of business of Borrower or any guarantor that is an entity;

5. Borrower’s or any guarantor’s failure to provide the Lender with financial information, including tax returns and financial statements, within any period required by this note or any guaranty, security agreement, loan agreement or other loan document governing, securing or relating to this note or any modifications, renewals, or extensions hereof continuing for thirty (30) days after written notice;

6. the insolvency, business failure of or the commencement of any kind of insolvency, receivership or bankruptcy proceedings by, or if not dismissed within sixty (60) days, against Borrower or any guarantor, or the Borrower’s or any entity guarantor’s taking a company vote authorizing such a filing or the retention of counsel for said purpose;

7. there shall occur, in the reasonable opinion of Lender, a material adverse change in the condition (financial or otherwise) of Borrower or any guarantor relative to (a) the condition of Borrower as reflected in the written financial projections delivered to Lender by Borrower prior to the date hereof, or (b) the condition of any such guarantor as reflected in any historical financial information provided by such guarantor to Lender.

Upon the occurrence of any “Event of Default” as defined above, Lender shall have the right to declare the entire indebtedness evidenced hereby immediately due and payable without notice or

ImmuCell Corporation

demand and to exercise any or all other remedies available at law or equity or as set forth in any documents securing this Note; provided, however, in the case of an Event of Default described in paragraph (6) above, (i) all amounts payable by the Borrower hereunder, including, without limitation, the principal balance and all accrued interest on this Note, shall automatically become immediately due and payable, without notice, action or election by Lender, and (ii) Lender may enforce any other rights granted pursuant to this Note, any other document, or by applicable law.

Upon the occurrence of any “Event of Default” as defined above, the Lender is also hereby fully authorized without notice to reduce to possession and ownership any and all money, deposits, credits, securities, and other property or proceeds thereof, now or hereafter in the hands of the Lender on deposit or otherwise for the account of, to the credit of, or belonging to, the Borrower, any Obligor, or the Borrower and any Obligor (collectively, the “ Deposits ”), and to apply same to any or all of the Liabilities hereunder, or Lender may impose an administrative freeze or hold on Borrower’s accounts or Deposits.

As used herein “ Liabilitie s” means any and all liabilities, indebtedness, and obligations of the Borrower and/or each Obligor to Lender of any nature whatsoever, now existing or hereafter arising, due or to become due, absolute or contingent, direct or indirect and whether joint, several, or joint and several; and “ Obligor ” shall mean and include each endorser, surety, guarantor or other party primarily or secondarily liable to the Lender hereunder other than the Borrower.

Borrower hereof agrees to pay all costs of collection, enforcement, supervision, and administration of this Note and the indebtedness evidenced hereby, including reasonable attorneys fees and costs by Lender’s attorneys, upon any actual or threatened default hereunder, whether or not suit is commenced. Borrower also agrees to pay all costs of Lender, including reasonable fees and costs of its attorneys, incurred in connection with any Bankruptcy, reorganization, insolvency, or other similar proceedings involving Borrower or any guarantor hereof.

FINANCIAL INFORMATION AND REPORTING :

As a material covenant hereof, Borrower agrees to provide Lender (i) within ninety (90) days after the close of Borrower’s fiscal year, complete audited financial statements for Borrower prepared in accordance with generally accepted accounting procedures together with any management letter that shall have been issued, and (ii) within forty five (45) days after the close of each of the first three quarters of Borrower’s fiscal year management prepared financial statements including a detailed balance sheet and profit and loss statement, and aging of accounts receivable and accounts payable; and (iii) such other documents and things evidencing Borrower’s net worth and financial condition as Lender may reasonably request from time to time.

ADDITIONAL PROVISIONS :

All parties hereto (whether maker, endorser, guarantor, or otherwise) hereby severally waive demand, presentment, notice of dishonor, protest, notice of protest and notice of acceleration; and every guarantor, accommodation maker, and endorser hereof assents to the terms of this Note and consents to any and all extensions or other indulgences, to any substitution, exchange or the release of any collateral and to the addition or release of any other party or person in any way liable hereunder, all without notice, and generally waive all suretyship rights and defenses while any sums remain outstanding hereunder.

ImmuCell Corporation

As a material covenant hereof, Borrower shall maintain its primary deposit relationship with Lender.

The obligations of all current and future makers, guarantors, and endorsers hereof shall be both joint and several.

This Note evidences a loan for business and/or commercial purposes, and not for consumer or household purposes.

This Note is, and is intended to be, secured by, inter alia :

A first priority Mortgage, Security Agreement, Assignment of Leases and Rents and Financing Statement dated on or about even date herewith with respect to property located at or about 56 Evergreen Drive, Portland, Maine; and

A first perfected security interest in all business assets of Borrower, including all accounts, inventory, machinery and equipment, general intangibles, fixtures, documents, deposit accounts, letter of credit rights, chattel paper, motor vehicles and all products and proceeds thereof, in accordance with a Security Agreement dated on or about even date herewith.

This Note may also be secured by other instruments executed and delivered by Borrower to Lender from time to time that either (a) specifically reference this Note, or (b) secure all obligations of Borrower to Lender. Reference is also hereby made to a Loan Agreement with respect to certain financial covenants dated on or about even date herewith. Borrower agrees with Lender that any default by Borrower under said Loan Agreement shall constitute an Event of Default under this Note.

Whenever notice, demand or a request may properly be given to Borrower hereof under this Note, the same shall always be sufficient if in writing and deposited in the United States mails, certified mail, postage prepaid, return receipt requested, addressed to Borrower either at the address given in this Note as Borrower’s address, or the business address last given at least 14 days prior to the giving of notice in question in writing to Lender hereof by Borrower for purposes of such notice, or at the time of delivery and actual receipt if given by hand delivery. Any such notice, demand or request shall be treated as having been given upon deposit in the United States mails, by certified or registered mail, postage prepaid, and return receipt requested, or upon the date of such hand delivery.

This Note is being executed and delivered in Portland, Maine and shall be governed by and construed in accordance with the laws of the State of Maine, to the maximum extent the parties may so lawfully agree. Borrower hereby submits to the jurisdiction of any state or federal court located within the State of Maine, to the jurisdiction of any state, federal or other court of the United States of America, the State of Maine, or any other state, district, commonwealth, territory, county, province, or country in which assets owned by Borrower are or may be located (including jointly with others). Notwithstanding any provision herein or in any instrument now or hereafter securing this Note, the total liability for payments in the nature of interest shall not exceed the limits imposed by the usury laws of said State.

ALL PARTIES HERETO HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY SUCH PARTY MAY HAVE TO A TRIAL BY JURY

ImmuCell Corporation

IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, ANY DOCUMENT SECURING THIS NOTE OR ANY OTHER LOAN DOCUMENT RELATING TO OR ARISING UNDER THIS NOTE, OR ANY COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY SUCH LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE SUBJECT LOAN TRANSACTION.

In the event any provision of this Note shall be determined by a court of competent jurisdiction to be invalid or unenforceable, said provision shall be deemed to be deleted and this Note modified accordingly and in such manner as to give effect to all other provisions hereof to the maximum extent possible with only the invalid or unenforceable provisions removed.

EXECUTED AS A SEALED INSTRUMENT, as of the day and year first above written.


	ImmuCell Corporation

/s/ David J. Champoux	By:	/s/ Michael F Brigham
Witness		Michael Brigham
		Its duly authorized President and CEO

EXHIBIT 10.3

ImmuCell Corporation

Commercial Promissory Note for $600,000 between the Company and TD Bank, N.A. dated August 13, 2010.

ImmuCell Corporation

COMMERCIAL

PROMISSORY NOTE


U.S. $600,000.00		Portland, Maine
		August 13, 2010

FOR VALUE RECEIVED, the undersigned, ImmuCell Corporation (the “ Borrower ”), having a mailing address of 56 Evergreen Drive, Portland, ME, promises to pay to the order of TD Bank, N.A. (together with its successors and assigns, the “ Lender ”), at its principal place of business at One Portland Square, P.O. Box 9540, Portland, Maine 04112-9540 the principal sum of Six Hundred Thousand & 00/100 Dollars ($600,000.00) or so much thereof as may be advanced in accordance with the terms hereof.

RATE OF INTEREST :

1. Commencing on the date hereof and continuing until the Maturity Date and payment in full of all indebtedness evidenced hereby, this Note shall bear interest at a variable and fluctuating annual rate equal to Three and One Quarter percent (3.25%) above the One Month LIBOR (London Interbank Offered Rate); provided, however, that in all events, that the Rate of Interest shall never be less than the floor of four and a quarter percent (4.25%).

ImmuCell Corporation

4. DEFAULT / POST JUDGMENT INTEREST RATE. The Lender shall have the right to charge interest on the unpaid principal balance hereof at an interest rate of four percent (4.0%) per annum in excess of the Rate of Interest otherwise payable as provided herein (the “ Default Rate ”) for any period during which the Borrower shall be in default under any material provision hereof or there shall be a default under any other document guarantying, governing or securing this Note. The Default Rate shall apply following entry of any judgment hereon notwithstanding any otherwise applicable statutory rate.

MONTHLY PAYMENTS OF PRINCIPAL AND INTEREST :

Payments of principal and interest upon this Note shall be calculated and paid as follows:

1. Borrower shall have up to six (6) months from the date hereof to request and receive advances of the loan proceeds. Such requests shall be made by Borrower to Lender in writing.

2. Beginning on September 13, 2010 and continuing on the 13 ^th day of each successive month through, to and including February 13, 2011, Borrower shall make monthly payments of interest only in arrears to Lender. Each monthly payment shall be equal to the total amount of interest that accrues on the total amount of principal that has been advanced hereunder.

3. Beginning on March 13, 2011 and continuing on the 13 ^th day of each successive month, through, to, and including July 13, 2015, Borrower shall make monthly payments of principal and interest to Lender in amounts deemed necessary by Lender in its sole discretion to amortize the then-outstanding principal balance over the remainder of a five (5) year amortization schedule that commenced on the date hereof at the Rate of Interest then in effect.

4. Payments shall be applied first to costs and expenses of the Lender for which Borrower is responsible under the terms of this Note or any instrument securing this Note, then to interest, and the remainder to reduction of principal.

TERM AND MATURITY :

The term of the loan evidenced hereby shall be five (5) years. Therefore, unless sooner accelerated, the Note shall mature on August 13, 2015 (the “ Maturity Date ”) at which time the entire principal balance of this Note (including costs and late fees), together with all interest thereon, shall be due and payable without further notice or demand.

PREPAYMENT PREMIUM :

The loan evidenced hereby may be prepaid in part or in full at any time without premium.

LATE CHARGES :

ImmuCell Corporation

EVENTS OF DEFAULT; REMEDIES :

Each of the following shall constitute an “ Event of Default ” hereunder:

1. Borrower shall fail to pay any installment of principal and/or interest hereunder when due;

2. any default or breach of condition shall occur under other terms of this note or under the terms of any current or future guaranty, security agreements, negative pledge or mortgages governing, securing or relating to this note or any modifications, renewals, or extensions hereof, not cured within any applicable grace or cure period;

4. the dissolution, liquidation or cessation of business of Borrower or any guarantor that is an entity;

6. the insolvency, business failure of or the commencement of any kind of insolvency , receivership or bankruptcy proceedings by, or if not dismissed within sixty (60) days, against Borrower or any guarantor, or the Borrower’s or any entity guarantor’s taking a company vote authorizing such a filing or the retention of counsel for said purpose;

ImmuCell Corporation

Upon the occurrence of any “Event of Default” as defined above, Lender shall have the right to declare the entire indebtedness evidenced hereby immediately due and payable without notice or demand and to exercise any or all other remedies available at law or equity or as set forth in any documents securing this Note; provided, however, in the case of an Event of Default described in paragraph (6) above, (i) all amounts payable by the Borrower hereunder, including, without limitation, the principal balance and all accrued interest on this Note, shall automatically become immediately due and payable, without notice, action or election by Lender, and (ii) Lender may enforce any other rights granted pursuant to this Note, any other document, or by applicable law.

FINANCIAL INFORMATION AND REPORTING :

ADDITIONAL PROVISIONS :

ImmuCell Corporation

notice, and generally waive all suretyship rights and defenses while any sums remain outstanding hereunder.

As a material covenant hereof, Borrower shall maintain its primary deposit relationship with Lender.

The obligations of all current and future makers, guarantors, and endorsers hereof shall be both joint and several.

This Note evidences a loan for business and/or commercial purposes, and not for consumer or household purposes.

This Note is, and is intended to be, secured by, inter alia :

ImmuCell Corporation

ALL PARTIES HERETO HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, ANY DOCUMENT SECURING THIS NOTE OR ANY OTHER LOAN DOCUMENT RELATING TO OR ARISING UNDER THIS NOTE, OR ANY COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY SUCH LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE SUBJECT LOAN TRANSACTION.

EXECUTED AS A SEALED INSTRUMENT, as of the day and year first above written.

EXHIBIT 10.4

ImmuCell Corporation

Line of Credit Agreement and Promissory Note for up to $500,000 between the Company and TD Bank, N.A. dated August 13, 2010.

ImmuCell Corporation

LINE OF CREDIT AGREEMENT

AND PROMISSORY NOTE


Borrower: ImmuCell Corporation		Lender: TD Bank, N.A.

Ceiling Amount: $500,000.00		Date of Note: August 13, 2010

TD Bank, N.A. a national banking association with a principal place of business at One Portland Square, P.O. Box 9540, Portland, Maine 04112-9540 (together with its successors and assigns, the “ Lender ”) commits itself, subject to the terms of this Agreement (the “ Agreement ”) to make advances (“ Advances ”) available to ImmuCell Corporation , a Delaware corporation with a mailing address of 56 Evergreen Drive, Portland, ME (the “ Borrower ”), in such amounts as Borrower may request, and the Borrower agrees to accept and repay Lender the Advances, with interest thereon at the Rate of Interest as defined herein, in accordance with the terms hereof. In no event shall the total Advances outstanding at any one time exceed the aggregate principal amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the “ Ceiling Amount ”).

The Borrower may borrow up to the Ceiling Amount in full or in part, repay in full or in part, and reborrow in accordance with the terms of this Agreement. In no event shall the total Advances outstanding at any one time exceed the Ceiling Amount as it may vary during various times of the year. Advances in excess of the Ceiling Amount are “ Overadvances .”

This Line of Credit and all amendments, extensions and replacements hereof is secured by all business assets of Borrower pursuant to a Security Agreement dated on or about even date herewith.

Lender’s commitment shall expire on the first to occur of the following: (a) the occurrence of an Event of Default as defined herein, or (c) the Maturity Date set forth below.

In consideration of this commitment by Lender, the Borrower agrees with the Lender as follows:

1. EXPIRATION DATE / MATURITY. The availability of Advances hereunder shall terminate and expire and this Agreement shall mature on July 31, 2011 (the “ Maturity Date ”). Therefore, unless sooner accelerated or renewed, the entire principal balance hereof (including costs and late fees), together with all interest thereon, shall be due and payable to Lender on said date without further notice or demand. If the Maturity Date is a day other than a business day of the Lender, the maturity hereof shall be extended to the next succeeding business day, and interest shall be payable with respect to such extension. The Maturity Date may be extended for successive periods at the Lender’s sole discretion following its review of credit, pricing and all other underwriting criteria deemed appropriate by Lender. Each successive renewal shall modify the Maturity Date, and the term “Maturity Date” shall mean such extended date. Renewal may be accomplished only by letter agreement or similar instrument signed by an officer of Lender.

2. RATE OF INTEREST. For each day any principal amount due hereunder shall remain outstanding and unpaid under this credit facility, interest shall accrue thereon at the following rates per annum (each a “ Rate of Interest ”) and shall be computed on the basis of actual days elapsed in a 360 day year:

ImmuCell Corporation

a. Commencing on the date hereof and continuing until the Maturity Date and payment in full of all indebtedness evidenced hereby, this Note shall bear interest at a variable and fluctuating annual rate equal to three and one half percent (3.50%) above the One Month LIBOR (London Interbank Offered Rate); provided, however, that in all events, that the Rate of Interest shall never be less than the floor of four and a quarter percent (4.25%).

b. The Rate of Interest shall be adjusted with each adjustment effective on the 13th day of each month (each a “ Reset Date ”) in accordance with changes in said One Month LIBOR and the terms hereof. Each resulting change in the Rate of Interest shall become effective, without notice to Borrower (which notice is hereby expressly waived by Borrower and all endorsers, guarantors, and sureties).

c. “ LIBOR ” (London Interbank Offered Rate) means the rate of interest in U.S. Dollars (rounded upwards, at the Lender’s option, to the next 100th of one percent) equal to the British Bankers’ Association LIBOR (“ BBA LIBOR ”) for the equivalent interest period as published by Bloomberg (or such other commercially available source providing quotations of BBA LIBOR as designated by Lender from time to time) at approximately 11:00 A.M. (London time) two London Banking Days prior to the Reset Date; provided however, if more than one BBA LIBOR is specified, the applicable rate shall be the arithmetic mean of all such rates. “London Banking Day” means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London, England. If, for any reason, such rate is not available, the term LIBOR shall mean, with respect to any interest period, the rate of interest per annum determined by Lender to be the average rate per annum at which deposits in dollars are offered for such Interest Period by major banks in London, England at approximately 11:00 A.M. (London time) two London Banking Days prior to the Reset Date.

d. DEFAULT / POST JUDGMENT INTEREST RATE. The Lender shall have the right to charge interest on the unpaid principal balance hereof at an interest rate of four percent (4.0%) per annum in excess of the Rate of Interest otherwise payable as provided herein for any period during which the Borrower shall be in default under any material provision hereof or there shall be a default under any other document guarantying, governing or securing this Note. The Rate of Interest as set forth herein shall apply following entry of any judgment hereon notwithstanding any otherwise applicable statutory rate.

3. PAYMENT. All payments shall be made by Borrower to Lender at its principal office in Portland, Maine in immediately available funds. Payments of interest hereunder shall be calculated, paid and applied as follows:

a. Beginning on September 13, 2010 and continuing on the 13th day of each successive month until the Maturity Date and payment of the total amount due hereunder in full, Borrower shall make monthly payments of interest only in arrears to the Lender. Each monthly payment shall be equal to the total amount of accrued interest on the total principal amount due hereunder.

b. Absent prior demand following an Event of Default, the entire principal balance

ImmuCell Corporation

due hereunder (including costs and late fees), together with all interest thereon, shall be due and payable to order of Lender without further notice or demand on the Maturity Date .

c. Payments shall be applied first to costs and expenses of the Lender for which Borrower is responsible under the terms hereof, then to interest, and the remainder to reduction of principal.

d. All Overadvances shall be repaid to the Lender immediately upon request by the Lender, or upon Borrower’s becoming aware of the Overadvance.

4. LATE CHARGES. Lender shall collect a “late charge” of six cents ($.06) for each one dollar of each payment due hereunder which is not paid within fifteen (15) days after the due date thereof. Acceptance by Lender of any late payment on one occasion shall not constitute a waiver by Lender of any defaults or of its right to insist on timely payments on any subsequent occasion.

5. NO PREPAYMENT PREMIUM. Borrower may pay all or any portion of the amount due hereunder at any time without premium. Early payments will not, unless otherwise agreed by Lender in writing, relieve Borrower of its obligation to continue to make payments of accrued, unpaid interest. Rather, early payments will reduce the principal balance due.

6. LINE OF CREDIT. Borrower hereby requests and authorizes the Lender to make Advances to Borrower during the term hereof, and in connection with each Advance to: (a) reduce the funds available hereunder by, and credit to the Borrower’s demand deposit account (or such other account as agreed upon by the parties) with the Lender, the proceeds of Advances hereunder requested by the Borrower pursuant to request form(s) satisfactory to and received by the Lender or at the option of Lender by telephone call by Borrower’s duly authorized representative; (b) enter into the records maintained by the Lender with respect to each Advance, all interest accruals, payments, other charges or items arising hereunder or otherwise properly chargeable or creditable to the Borrower’s account in accordance with generally accepted accounting principles or Lender’s standard bank policies, practices and fee schedules as they may be amended from time to time; and (c) render to Borrower a monthly statement of interest and the then outstanding principal balance due hereunder. Each such statement shall be considered accepted by and conclusively binding upon Borrower unless Borrower gives Lender written notice of exceptions within sixty (60) days of the receipt of said statement by Borrower.

This Agreement evidences a revolving line of credit. Upon duly authorized written request from Borrower, Lender may, but is not obligated to, make Advances under this Agreement pursuant to oral requests by Borrower. In such case, Lender reserves the right to require Borrower to confirm all oral requests in writing on the day of the request. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender’s office shown above. The following person is currently authorized to request Advances and authorize payments under the line of credit until Lender receives from Borrower, at Lender’s address shown above, written notice of revocation of his authority: Michael Brigham. Borrower agrees to be liable for all sums either (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing hereunder at any time may be evidenced by endorsements on this Agreement or any schedules attached hereto or by Lender’s internal records, including daily computer print-outs.

Lender will have no obligation to advance funds under this Agreement if: (A) an Event of Default has occurred and is continuing, or (B) an event has occurred which with the passage of time or

ImmuCell Corporation

giving of notice if left uncured would constitute an Event of Default hereunder.

7. ADVANCE RATIO PROVISION. Advances hereunder shall never exceed the lesser of (a) $500,000; and (b) a sum equal to seventy percent (70%) of Eligible Accounts Receivable plus fifty percent (50%) of Eligible Inventory. The Lender may change the aforementioned advance ratio at its discretion. As used herein, Eligible Accounts Receivable is defined as domestic accounts receivable which are under ninety (90) days old, and Eligible Inventory is defined as all raw materials and inventory other than work in progress.

8. FINANCIAL COVENANTS AND REPORTING. As a material covenant hereof, Borrower agrees:

a. to provide Lender (i) within ninety (90) days after the close of Borrower’s fiscal year complete audited financial statements for Borrower prepared in accordance with generally accepted accounting procedures together with any management letter that shall have been issued, and (ii) within forty five (45) days after the close of each of the first three quarters of Borrower’s fiscal year management prepared financial statements including a detailed balance sheet and profit and loss statement, and aging of accounts receivable and accounts payable; and (iii) such other documents and things evidencing Borrower’s net worth and financial condition as Lender may reasonably request from time to time; and

b. to maintain a primary deposit relationship with Lender.

9. DEFAULT. Each of the following shall constitute an event of default (each an “ Event of Default ”) under this Agreement:

a. Borrower shall fail to pay when due any principal or interest due hereunder or under any replacements, extensions, renewals or modifications hereof or any other fee or payment due hereunder.

b. Borrower shall fail to pay any Overadvance immediately upon receipt of any notice of same, regardless of whether such Overadvance was an Overadvance when made or subsequently became one, including because the Ceiling Amount is reduced or varies in accordance with the terms hereof.

c. Default shall occur in the performance of any of the covenants or agreements of Borrower contained herein or in any of the other obligation of Borrower to Lender (other than covenants for the payment of money, which are covered under subparagraphs (a) or (b) immediately preceding) and such default continues for fifteen (15) days after written notice thereof is given by the Lender to the Borrower.

d. Borrower shall apply for or consent to the appointment of a receiver, custodian, trustee, intervenor or liquidator of such party or of all or a substantial part of such party’s assets, file or make a corporate vote to file a voluntary petition under the United States Bankruptcy Code, file an answer admitting the material allegations of, or consent to or default in answering an involuntary petition filed against such party in any Bankruptcy, reorganization or insolvency proceeding, become the subject of an order for relief under any Bankruptcy, reorganization or insolvency proceeding, become insolvent within the meaning of 11 U.S.C § 101, admit in writing that such party is unable to pay its debts as they become due, generally not pay such party’s

ImmuCell Corporation

debts as they become due or make a general assignment for the benefit of creditors.

e An order, judgment or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition appointing a receiver, custodian, trustee or liquidator of Borrower or of all or substantially all of Borrower’s assets, and such order, judgment or decree shall continue unstayed and in effect for a period of 90 days; or a complaint or petition shall be filed against Borrower seeking or instituting a Bankruptcy, insolvency, reorganization, rehabilitation or receivership proceeding against Borrower and such petition or complaint shall have not been dismissed within ninety (90) days.

f. Borrower’s dissolution or cessation of normal business operations.

g. Borrower shall fail to maintain its primary deposit relationship with Lender

h. Borrower shall become in default of any provision of a certain Loan Agreement dated on or about even date herewith as the same may be amended from time to time.

10. LENDER’S RIGHTS AND REMEDIES. If an Event of Default shall occur, Lender at its option may exercise any or all the following remedies without thereby being deemed to have elected remedies:

a. Declare the entire unpaid principal balance on this Line of Credit Agreement and all accrued unpaid interest immediately due and payable whereupon the same shall forthwith become due and payable without notice, presentment, demand, protest, notice of intention to accelerate, notice of acceleration, or other notice of any kind, all of which Borrower hereby expressly waives, anything contained herein to the contrary notwithstanding; provided, however, in the case of an Event of Default described in subparagraphs 9(d) or (e) above, (i) all amounts payable by the Borrower hereunder, including, without limitation, the principal balance and all accrued interest on this Agreement, shall automatically become immediately due and payable, without notice, action or election by Lender, and (ii) Lender may enforce any other rights granted pursuant to this Agreement, any other document, or by applicable law.

b. Immediately, without notice to Borrower, cease to make any Advances hereunder.

c. Reduce any claim to judgment.

d. Exercise all rights and remedies available to Lender at law or in equity.

e. Impose an administrative “freeze” on Borrower’s accounts or reduce to possession and ownership any and all money, deposits, credits, securities, and other property or proceeds thereof, now or hereafter in the hands of the Lender on deposit or otherwise for the account of, to the credit of, or belonging to, the Borrower, any Obligor, or the Borrower and any Obligor (collectively, the “ Deposits ”), and to apply same to any or all of the Liabilities hereunder.

As used in this Section, “ Liabilities ” means any and all indebtedness for borrowed money of the Borrower and/or each Obligor to Lender of any nature whatsoever, now existing or hereafter arising, due or to become due, absolute or contingent, direct or indirect and whether joint, several, or joint and several; and “ Obligor ” shall mean and include each endorser, surety,

guarantor or other party primarily or secondarily liable to the Lender hereunder or under any guaranty relating to the Liabilities other than the Borrower.

Borrower agrees to pay all reasonable costs of collection, supervision, and administration of all amounts due hereunder and the indebtedness evidenced hereby (including, without limitation, of any renewals, extensions, replacements, or modifications hereof), including reasonable attorneys fees and costs of Lender’s attorneys, incurred in connection with any actual or threatened Event of Default hereunder, whether or not suit is commenced. Borrower also agrees to pay all reasonable costs of Lender, including reasonable fees and costs of its attorneys, incurred in connection with any Bankruptcy, reorganization, insolvency, or other similar proceedings involving Borrower.

11. WAIVE JURY. Borrower hereby expressly and voluntarily waives any and all rights, whether arising under the United States or Maine Constitution, any Rules of Civil Procedure, common law or otherwise, to demand a trial by jury in any action, suit, proceeding or counterclaim involving Lender as to any matter, claim or cause of action whatsoever arising out of or in any way related to this Agreement or any loan with Lender or any of the transactions contemplated between the parties.

12. GOVERNING LAW. This Agreement is being executed by the parties, delivered by Borrower and accepted by Lender in Portland, Maine and shall be governed by and construed in accordance with the laws of the State of Maine to the maximum extent the parties may so lawfully agree. Borrower hereby submits to the jurisdiction of any state or federal court located within the State of Maine, to the jurisdiction of any state, federal or other court of the United States of America, the State of Maine, or any other state, district, commonwealth, territory, county, province, or country in which assets owned by Borrower are or may be located (including jointly with others). Notwithstanding any provision herein or in any instrument now or hereafter securing this Agreement, the total liability for payments in the nature of interest shall not exceed the limits imposed by the usury laws of said State.

13. DISHONERED ITEM FEE. Borrower will pay a fee to Lender of $50.00 if Borrower makes a payment under this Agreement and the check or preauthorized charge with which Borrower pays is later dishonored.

14. SUCCESSOR INTERESTS. The terms of this Agreement shall be binding upon Borrower, and upon Borrower’s successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

15. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs, guarantees, or endorses this Agreement, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any changes in the terms of this Agreement, and unless otherwise expressly stated in writing, no party who signs this Agreement or any guaranty or security agreement of any kind, whether as maker, guarantor, accommodation maker or endorser, shall be

ImmuCell Corporation

released from liability. All such parties agree that Lender may renew or extend repeatedly and for any length of time this Agreement or release any party or guarantor or collateral without thereby releasing Borrower or any guarantor from liability hereunder. Neither Borrower nor any guarantor will be released from liability hereunder if Lender fails to realize upon or perfect Lender’s security interest in any collateral, releases any obligor, guarantor or collateral, extends, renews or modifies the terms hereof or otherwise takes any action deemed necessary by Lender with or without the consent of or notice to anyone and even over objection. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. In the event any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, said provision shall be deemed to be deleted and this Agreement modified accordingly and in such manner as to give effect to all other provisions hereof to the maximum extent possible with only the invalid or unenforceable provisions removed.

This Agreement and each Advance hereunder are for a business, commercial or agricultural purpose and not for a personal, consumer or household purpose.

Whenever notice, demand or a request may properly be given to Borrower under this Agreement, the same shall always be sufficient if in writing and deposited in the United States mails, certified mail, postage prepaid, return receipt requested, addressed to Borrower either at the address given in this Agreement as Borrower’s address, or the business address given in writing to Lender hereof by Borrower more than thirty (30) days prior to the date Lender sends Borrower the notice in question. Any notice, demand or request hereunder shall be treated as having been given two (2) business days after deposit in the United States mails, by certified or registered mail, postage prepaid, and return receipt requested, or upon the date of hand delivery if delivered on a business day.

In witness hereof the parties hereto have EXECUTED THIS AGREEMENT AS A SEALED INSTRUMENT, as of the day and year first above written.


	ImmuCell Corporation, Borrower

/s/ David J. Champoux	By:	/s/ Michael F. Brigham
Witness		Michael Brigham
		Its duly authorized President and CEO

	TD Bank, N.A., Lender

/s/ Josh Dow	By:	/s/ Benjamin C. Geci
Witness		Benjamin C. Geci
		Senior Vice President

EXHIBIT 10.5

ImmuCell Corporation

Loan Agreement between the Company and TD Bank, N.A. dated August 13, 2010.

Confidential Treatment as to certain portions has been requested, which portions have been omitted and filed separately with the Securities and Exchange Commission

ImmuCell Corporation

Loan Agreement

This Agreement is entered into this 13 ^th day of August, 2010 by, between and among ImmuCell Corporation (the “ Borrower ”) and TD Bank, N.A . (together with its successors and assigns, the “ Lender ”).

RECITALS

1. The parties have entered into loan transactions of or about even date herewith in the amount of up to an aggregate of $2,100,000 with respect to term debt and line of credit financing in said amount secured by real property and improvements and all business assets of the Borrower (together with all modifications, extensions, renewals and replacements thereof the “ Loans ”).

2. Under the documents evidencing the Loans (the “ Loan Documents ”), Borrower is required to maintain, remain in compliance with and otherwise adhere to certain financial covenants (the “ Covenants ”) so long as any of the Loans are outstanding.

3. The parties intend to memorialize the Covenants in a single document that will remain in full force and effect until the Loans and any other existing and / or future loans governed hereby are paid in full. In the event of additional, future loans between the parties, they too will be governed hereby unless expressly stated otherwise in writing.

4. This agreement is intended by the parties, to set forth financial Covenants governing the Loans and all existing and future loans to the Borrower from the Lender with respect to the specific types of covenants set forth herein. Certain of the Loan Documents may impose or require compliance with other financial covenants, none of which are affected hereby.

AGREEMENT

In consideration of the mutual covenants and conditions herein contained, and intending to be legally bound, the parties hereto agree as follows:

1. Application of Covenants Generally . The Covenants set forth herein shall apply to the Borrower while any of the Loans and any and all notes, liabilities, advances, loans, obligations or indebtedness of any kind or description from Borrower to Lender remain outstanding, whether now existing or hereafter owing or arising, howsoever evidenced, created, incurred, acquired or owing, whether primary or secondary, joint and/or several, direct or indirect, absolute or contingent, or otherwise, remain outstanding (all of the above hereinafter referred to as the “ Obligations ”). The Covenants may be modified by the parties at any time, but only by a written document signed by the parties.

ImmuCell Corporation

2. Definitions .

For purposes of this Agreement, the following terms shall have the respective meanings assigned to them below:

“ CMLTD ” shall mean the principal and capital lease payments paid during the preceding four quarters of each fiscal year end of Borrower.

“ Distributions ” shall mean all cash dividends to shareholders.

“ Earnings ” shall mean earnings as defined under GAAP.

“ EBITDA ” means, for any period, Earnings from continuing operations before payment of federal, state and local income taxes, plus Interest Expense, depreciation and amortization, in each case for such period, computed and calculated in accordance with GAAP.

“ GAAP ” means Generally Accepted Accounting Principles in effect from time to time in the United States.

“ Intangible Assets ” means, as of the date of determination thereof, assets that in accordance with GAAP are properly classifiable as intangible assets, including, but not limited to, goodwill, franchises, licenses, patents, trademarks, trade names, deferred assets and copyrights.

“ Interest Expense ” means, for any period, ordinary, regular, recurring and continuing expenses for interest on all borrowed money.

“ Marketable Securities ” means stocks, bonds, and mutual fund shares that can be readily sold for cash on stock exchanges or over-the-counter markets, or bank certificates of deposit.

“ Tangible Net Worth ” means, as of the date of determination thereof, total assets, excluding all Intangible Assets, all obligations owed from affiliates or any employee, shareholder, partner or member, any capitalized start-up or development expense, and any write up or reappraisal of the Borrower’s existing assets less total liabilities.

3. Financial Covenants . As long as any Obligations, including any of the Loans, of Lender to Borrower remain outstanding, unpaid and/or committed, Borrower shall remain in compliance with the following covenants:

A. Debt Service Coverage Ratio Covenant . The Borrower covenants that beginning with its fiscal year end next following the date of this Agreement and continuing with each fiscal year thereafter, it shall not permit the ratio of its EBITDA, minus taxes paid in cash and Distributions divided by Interest Expense plus CMLTD to be less than 1.30 to 1.00 for any fiscal year. For purposes of calculating this covenant, EBITDA shall not include any gains or losses from the sale of assets outside the normal course of business or any other extraordinary accounting adjustments or non- recurring items of income or loss, all of the foregoing as determined by the Lender . Product development payments to Lonza Sales, Ltd shall be added back to EBITDA up to $xxxxxxxxx in 2010 and $xxxxxxxxx for 2011. This covenant will be measured at and as of the end of each fiscal

ImmuCell Corporation

year end following Borrower’s submission of financial statements to Lender as required hereby and by instruments evidencing the Loans dated on or about even date herewith.

B. Liquidity . The Borrower covenants that from and after the date hereof, the Borrower shall not permit its unrestricted cash accounts, plus the value of Borrower’s Marketable Securities to be less than $1,000,000. This covenant will be measured at and as of the end of each fiscal quarter following Borrower’s submission of financial statements to Lender as required hereby and by instruments evidencing the Loans dated on or about even date herewith.

C. Debt to Tangible Net Worth . The Borrower covenants that from and after the date hereof, the Borrower shall not permit its ratio of total liabilities to Tangible Net Worth to be above 1.25 to 1.00. This covenant will be measured at and as of the end of each fiscal quarter end following Borrower’s submission of financial statements to Lender as required hereby and by instruments evidencing the Loans dated on or about even date herewith. This covenant will be measured quarterly on a rolling four quarter basis.

4. Financial Reporting . As a material covenant hereof, Borrower agrees to provide Lender (i) within ninety (90) days after the close of Borrower’s fiscal year, complete audited financial statements for Borrower prepared in accordance with GAAP together with any management letter that shall have been issued, and (ii) within forty five (45) days after the close of each of the first three quarters of Borrower’s fiscal year management prepared financial statements including a detailed balance sheet and profit and loss statement, and aging of accounts receivable and accounts payable; and (iii) such other documents and things evidencing Borrower’s net worth and financial condition as Lender may reasonably request from time to time.

5. Covenant calculation . All year end calculations shall be based upon the audited financial statements provided by Borrower to Lender at year end, and all quarterly calculations shall be based upon internally prepared financial statements submitted by the Borrower to the Bank that are acceptable to the Bank; provided, however, that if Borrower’s financial statements as reported by Borrower do not in Lender’s view accurately reflect Borrower’s operations, and Lender makes an independent, good faith determination of Borrower’s Net Income, assets or liabilities, Lender’s determination will be conclusive.

6. Title Insurance Commitment . Within thirty (30) days of the date hereof, Borrower shall provide Lender with a clean commitment for a title insurance policy with respect to that certain mortgage on property located at or about 56 Evergreen Drive, Portland, Maine being executed and delivered by Borrower to Lender of or about even date, which title commitment shall (a) not contain a survey exception; and (b) otherwise be in form and content satisfactory to Lender and its counsel.

ImmuCell Corporation

In witness whereof the parties have set their hands and seals of the date above set forth.


	ImmuCell Corporation

/s/ David J. Champoux	By:	/s/ Michael F. Brigham

Witness		Michael Brigham

		Its duly authorized President and CEO

	TD Bank, N.A.

/s/ Josh Dow	By:	/s/ Benjamin C. Geci

Witness		Benjamin C. Geci,

		Senior Vice President

EXHIBIT 31

ImmuCell Corporation

RULE 13a-14(a) CERTIFICATIONS

I, Michael F. Brigham, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 of ImmuCell Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of ImmuCell Corporation as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-315(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for ImmuCell Corporation and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to ImmuCell Corporation is made known to me by others within ImmuCell Corporation, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of ImmuCell Corporation’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) disclosed in this report any change in ImmuCell Corporation’s internal control over financial reporting that occurred during ImmuCell Corporation’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, ImmuCell Corporation’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to ImmuCell Corporation’s auditors and the audit committee of ImmuCell Corporation’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect ImmuCell Corporation’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in ImmuCell Corporation’s internal control over financial reporting.

August 16, 2010

/s/ Michael F. Brigham

Michael F. Brigham

President, Chief Executive Officer

and Principal Financial Officer

EXHIBIT 32

ImmuCell Corporation

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of ImmuCell Corporation (the “Company”) for the quarter ended June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael F. Brigham, President, Chief Executive Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael F. Brigham

Michael F. Brigham

President, Chief Executive Officer

and Principal Financial Officer

August 16, 2010

A signed original of this written statement required by Section 906 has been provided to ImmuCell Corporation and will be retained by ImmuCell Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company