Document:

EXHIBIT 10.29

 

LICENSE/ JOINT DEVELOPMENT AGREEMENT

 

This LICENSE/ JOINT DEVELOPMENT AGREEMENT
(this “Agreement”) is entered into as of November 4,
2005 (the “Effective Date”), by and among CYTORI THERAPEUTICS, INC., a Delaware corporation, located at 3020 Callan Road, San Diego, CA 92121, U.S.A. (“Cytori”), OLYMPUS
CORPORATION, a Japanese corporation, with its principal office at
2-43-2 Hatagaya Shibuya-ku, Tokyo, Japan (“Olympus”),
and Olympus-Cytori, Inc. a Delaware
corporation, located at 3020 Callan Road, San Diego, CA 92121, U.S.A. (“NewCo”).

 

Cytori,
Olympus and NewCo shall each be referred to individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

A. Cytori
has acquired and possesses, through the expenditure of considerable time, effort
and money, certain intellectual
property rights (including patents,
patent applications and technical information) to regenerative cell technology,
including scientific equipment used to carry out regenerative cell therapies
and treatments.

 

B. On and subject to the terms and
conditions set forth herein and pursuant
to Section 2.3 of a Joint Venture Agreement by and between Cytori and
Olympus Corporation, dated as of November 4, 2005 (the “JVA”), Olympus is prepared to
grant to NewCo, and NewCo desires to obtain from Olympus, an exclusive license to use such intellectual property rights
of Olympus for purposes of developing, manufacturing and selling to Cytori the Licensed Product(s) (as defined below).

 

C. The
obligations of the Parties under the JVA and the Ancillary Agreements (as
defined in the JVA) is conditioned on Cytori, NewCo and Olympus entering into
this Agreement, which sets forth, among other things, certain terms and
conditions under which the Parties will jointly develop the Licensed Product(s)
for sale in the Licensed Field (as defined below).

 

D. NewCo
desires Cytori and Olympus to jointly develop Licensed Product(s), and Cytori
and Olympus are willing to perform such Licensed Product(s) development under
the terms and conditions provided for herein.

 

NOW, THEREFORE,
in consideration of the foregoing, the mutual promises herein contained, and
for other good and valuable consideration, the receipt and adequacy of which
are acknowledged, the Parties agree as follows

 

SECTION 1

DEFINITIONS

 

1.1           Definitions. As
used in this Agreement, the capitalized terms set forth in this Section 1 shall
have the following meanings, and may be read in the singular, plural or an
alternative tense as the context requires.

 

“Acceptance” means NewCo’s
express written acceptance and acknowledgement (which shall not be unreasonably
withheld) of the completion of development of a given Licensed Product in accordance
with the Development Plan and in satisfaction of the Specifications.

 

“Acceptance Procedures” means the procedures
and criteria under which NewCo shall test each Licensed Product Deliverable, as
set forth in further detail in Exhibit 1A. [These
procedures to be mutually agreed between the Parties in connection with the
final determination of the Development Plan and Specification.]

 

“Affiliate”
means, as to any
Party, any Person that, directly or indirectly, controls, or is controlled by,
or is 

 

 

under common control
with, such Party, where “control” (including, with its correlative meanings, “controlled
by” and “under common control with”) means (a) the beneficial ownership of
fifty percent (50%) or more of the outstanding voting securities of such Party,
or (b) the possession, directly or indirectly, of the power to direct or cause
the direction of management or policies of such Party, whether through the
ownership of securities or partnership or other ownership interests, by
contract or otherwise.

 

“Agreement”
shall have the meaning ascribed thereto in the Preamble, and shall
include this Agreement and each Exhibit attached hereto, as each such Exhibit
may be amended, varied, novated or substituted from time to time by written
mutual agreement of the Parties.

 

“Cytori”
shall have the meaning ascribed thereto in the preamble.

 

“Cytori Indemnitees” shall have the
meaning ascribed thereto in Section 11.3.

 

“Cytori IP” shall mean all
Intellectual Property Rights licensed to NewCo by Cytori in accordance with the
License/ Commercial Agreement, any Ancillary Agreement or otherwise.

 

“Cytori Development Fees” shall
mean     ***     United States Dollars (USD   ***     ).

 

“Deliverables” shall mean the
information, data, equipment, prototypes and components listed and described in
the Development Plan.

 

“Development Plan” shall mean the
written research and development plan for the Licensed Product(s), as set forth
in (or to be set forth in) Exhibit 1B.

 

“Developer(s)” shall mean both
Cytori and Olympus, and when used in a singular form, either Cytori or Olympus,
as the context requires.

 

“Effective Date”
shall have the meaning ascribed thereto in the Preamble.

 

“Exhibit” shall refer to each of the
exhibits attached to this Agreement, each of which is hereby incorporated by
reference.

 

“Final Product(s)” shall mean
a Licensed Product(s) developed hereunder in full accordance with the
Development Plan and the Specifications, and that has received Acceptance by
NewCo.

 

“Intellectual
Property Rights” or “IP” shall
mean (a) all inventions (whether patentable or unpatentable and whether or not
actually reduced to practice), all improvements thereto (but only if
such improvements relate to inventions in existence as of the Closing), and all patents, provisional and
non-provisional patent applications and patent disclosures, together with all
reissuances, divisions, continuations, continuations-in-part, renewals,
extensions and reexaminations thereof, (b) all copyrightable works, all works
of authorship, all copyrights, and all applications, registrations and renewals
in connection therewith, (c) all mask works and all applications, registrations
and renewals in connection therewith, (d) all trademarks, service marks, trade
names, service names, brand names, trade dress rights, logos, Internet domain
names and corporate names, together with the goodwill associated with any of the
foregoing, (e) all trade secrets and confidential business information
(including, but not limited to, ideas, research and development information,
know-how, formulas, compositions, biochemical and biological materials,
reagents, assays, manufacturing and
production processes and techniques, technical data, data base rights, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals, and (f) any and all applications and registrations
of the foregoing (in any jurisdiction).

 

*** Material has been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.

 

 

“Indemnifying Party” shall have the
meaning ascribed thereto in Section 11.1.

 

“Indemnified Party” shall have the
meaning ascribed thereto in Section 11.1.

 

“Indemnity Claim” shall have the
meaning ascribed thereto in Section 11.5.1.

 

“Indemnity Claim Notice” shall have
the meaning ascribed thereto in Section 11.5.1.

 

“JVA”
shall have the meaning ascribed thereto in Recital B.

 

“License/
Commercial Agreement” shall mean the License/ Commercial
Agreement to be entered into by and between Cytori and NewCo at Closing.

 

 “Licensed
Field” shall mean the use of the Licensed IP for the purpose of designing, developing, manufacturing, testing and servicing Licensed Products for
sale exclusively from NewCo to Cytori.

 

“Licensed IP”
means all Intellectual Property Rights owned or controlled by a Party which are
necessary or useful to design, develop, manufacture, test, analyze, market,
offer to sell to Cytori, sell to Cytori and service all current and future
generations of the Licensed Product(s). The term “Licensed IP” shall include
Cytori IP, Olympus IP and NewCo IP.

 

“Licensed Product(s)” shall mean any automated
devices (and related component parts) that                    ***                   separate
and concentrate                   ***                   cells
(including stem cells and other regenerative cells) from harvested adipose
tissue (fat tissue). The device components include, but are not limited
to                   ***                   

***

 

***

 

“Milestone” means a specific stage
of the Development Plan.

 

“NewCo”
shall have the meaning ascribed thereto in the Preamble.

 

“NewCo Indemnitees” shall have the
meaning ascribed thereto in Section 11.4.

 

“NewCo IP” means all Intellectual Property Rights owned by or acquired
by NewCo in connection with and during the term of the JVA, including licenses
granted to NewCo with respect to Cytori IP and Olympus IP.

 

“Olympus
Indemnitees” shall have the meaning ascribed thereto in Section
11.2.

 

 “Olympus IP” shall mean all
Intellectual Property Rights owned by Olympus and licensed to NewCo in accordance with this
Agreement, any Ancillary Agreement or otherwise, including, without limitation, those patents, patent applications and
other Intellectual Property Rights.

 

“Olympus Development Fees” shall
mean   ***    United States Dollars (USD   ***   )

 

“Party” and “Parties” shall have the meaning
ascribed thereto in the Preamble.

 

*** Material has been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.

 

 

“Person”
shall mean an association, corporation, individual, partnership, trust or any
other entity or organization, including a governmental entity, other than a
Party to this Agreement.

 

“Rules” shall have the meaning
ascribed thereto in Section 16.3

 

“Specifications” shall mean (a) the
technical specifications of the commercially acceptable Licensed Product(s) and
each
Deliverable, as set forth in the Development Plan, or (b) the technical
specifications of the commercially acceptable Licensed Product(s) and
each
Deliverable which has received Acceptance by NewCo.

 

“Survival Period” shall have the
meaning ascribed thereto in Section 11.6.

 

“Three-Way NDA” shall mean the
Three-Way Non-Disclosure Agreement, dated [                ],
entered into by and among Cytori, Olympus and NewCo.

 

SECTION 2

LICENSE GRANT

 

2.1                                 Olympus License
Grant. Subject to the terms, conditions and limitations set forth in this
Agreement and the JVA (with its Ancillary Agreements), Olympus hereby agrees to grant to NewCo with
respect to any Intellectual Property of Olympus, that Olympus incorporates into
the Licensed Products, a non-exclusive, sublicenseable, irrevocable, worldwide, fully paid-up license under the Olympus IP (including any
improvements thereto) so incorporated, in the Licensed Field, for the term of the Joint Venture, to design, develop, make, have made, use, translate, perform, service, maintain, import,
offer to sell and sell Licensed Product(s), each Deliverable and any part or
component thereof, as contemplated by the JVA to the extent not subject to any
third party restrictions applicable to Olympus IP. The right of NewCo to grant
sublicenses to any third party other than Cytori under such Olympus IP shall be
subject to the written consent of Olympus, which shall not be unreasonably
withheld or delayed. If Olympus wishes to incorporate any Olympus IP
(including any third-party IP rights licensed to Olympus and any Olympus IP
exclusively licensed to a third party) into a Licensed Product (or into any
Licensed Product-related process) that (i) would require a further license or
sublicense to NewCo and/or Cytori in order for Newco and/or Cytori to practice
such Intellectual Property Right in making, using, selling, offering for
sale, importing or otherwise exploiting Licensed Products; or (ii) would
require royalty or other payments by NewCo, Cytori or Olympus to any third party; or (iii) is not
available for licensing or sublicensing to NewCo and/or Cytori, then Olympus
must first obtain Cytori’s approval (after full disclosure by Olympus of all
applicable terms and conditions associated therewith). For avoidance of doubt,
Olympus shall not be required to grant any license to NewCo except in so far as
Olympus, in its sole discretion, elects to incorporate such Olympus IP into the Licensed
Products.

 

2.2                                 NewCo
License Grant. Subject to the terms, conditions and
limitations set forth in this Agreement and the JVA (with its Ancillary
Agreements), NewCo hereby grants to Olympus
and to Cytori a non-exclusive, perpetual, sublicenseable, irrevocable, fully paid-up, worldwide
license (or sublicense, as applicable)
under all NewCo IP (including any improvements thereto) in the Licensed Field,
to design, develop,  make, have made, use, translate, perform, service, maintain, import, offer to sell and
sell, Licensed Product(s), each Deliverable and any part or component thereof, as
contemplated by the JVA. Each of Olympus and Cytori may grant
sublicenses to a third party only with the prior consent of NewCo.

 

 

2.3                                 No Reverse
Engineering. Each Party agrees not to reverse engineer, disassemble
or decompile the whole or any part of any other Party’s IP , or to use any
other Party’s IP in any manner not expressly authorized or contemplated by this
Agreement and the JVA. If a Party and/or its end users believe that they are
entitled to reverse engineer the IP of another Party by virtue of rights that
may be granted as a matter of applicable law, such as the Council Directive of
14 May 1991 of the Council of the European Communities (as amended), such Party
represents that (a) such Party and its end users shall first request the
technical information from such other Party; and (ii) such technical
information shall be used only to the extent permitted under such applicable
law.

 

SECTION 3

DEVELOPMENT COMMITTEE

 

3.1                                 Development
Committee. From time to time, the Developers may establish a development
committee (the “Development Committee”)
to oversee, review and coordinate the research and development of Licensed
Product(s) and the implementation of the Development Plan. From time to
time, the Development Committee may establish subcommittees, to oversee
particular projects or activities (such as separate committees to oversee
product development), and such subcommittees will be constituted as the
Development Committee agrees.

 

3.2                                 Membership.
In
the event that the Development Committee is established under Section 3.1, the
Development Committee shall be comprised of an equal number of representatives
from each of Olympus and Cytori, as appointed by each Developer.
Subject to the foregoing provisions of this Section 3.2, each
Developer may replace any of its respective Development Committee
representatives at any time, with prior written notice to the other Developer.
The
Parties agree and acknowledge that the representatives appointed by each
Developer to the Development Committee have no authority to legally bind any
Developer.

 

3.3                                 Meetings.
In
the event that the Development Committee is established under Section 3.1, the
Development Committee shall meet as agreed by the Developers, at such locations as
the Developers
mutually agree. At its meetings, the Development Committee shall (a) formulate
and review (but not modify) the Development Plan objectives; (b) monitor the Parties’ progress
under the Development Plan toward those objectives; and/or (c) discuss any problems that
arise in the implementation of the Development Plan. With the consent of
both Developers, other representatives of each Developer may attend
Development Committee meetings. The Development Committee shall prepare written
minutes of each Development Committee meeting and a written record of all
Development Committee discussions, whether made at a Development
Committee meeting or otherwise. Such minutes of the Development Committee
meeting shall only be effective when they are subsequently approved in writing
by all
of the appointed representatives on the Development Committee. Each Developer
shall bear its own costs and expenses, including without limitation travel
costs and expenses, associated with its appointed representatives’ attendance
at Development Committee meetings. The Parties agree and acknowledge that the Development
Committee shall not have any authority to bind any of the Parties to any
contractual obligations or to otherwise amend this Agreement.

 

SECTION 4

DEVELOPMENT OF THE FINAL
PRODUCT(S)

 

4.1                                 Joint Development.
Immediately following the Effective Date, the Developers shall commence

 

 

development of Final Product(s) in accordance with, and as
described in further detail in, the Development Plan.

 

4.2                                 Disclosure
of Olympus IP. Subject to the terms, conditions and limitations set
forth in this Agreement, Olympus shall to its best knowledge deliver and
disclose to NewCo, and NewCo shall be entitled to share with Cytori, all
Olympus IP that is incorporated into or with the Final Product(s), NewCo shall
provide Cytori with any other technical information and assistance in this
regard, as set forth in the Development Plan.

 

4.3                                 Disclosure
of Cytori IP. Subject to the terms, conditions and limitations set
forth in this Agreement, Cytori shall deliver and disclose to NewCo, and NewCo
shall be entitled to share with Olympus, all Cytori IP that is necessary or
useful for (or related to) the development of Final Product(s), or which is
necessary or useful for NewCo’s or Olympus’ performance of its
obligations under this Agreement. NewCo shall provide Olympus with any other technical
information and assistance in this regard, as set forth in the Development
Plan.

 

4.4                                 Changes to
Development Plan. The Development Plan and Specifications shall set forth
the base requirements and specifications for each Final Product. If the requirements
or specifications for the Final Product(s) need to be amended in order
to further the Developers’ objectives hereunder, the Developers will use
their own respective commercially reasonable efforts to negotiate such
necessary amendments to the Development Plan, while minimizing the impact to
the cost and timing of the development of the Final Product(s).

 

4.5                                 Third
Party Assistance. In performing its obligations under this Agreement (more
specifically, in developing and manufacturing the Final Product(s) and in providing each
Deliverable), a Developer shall not cooperate or collaborate
with any third party without the prior written consent of the other Developer,
which consent may be withheld at the other Developer’s sole discretion, provided
that, either Developer may retain subcontractors or may subcontract in performing
its obligations under this Agreement. For the avoidance of doubt, either
Developer may hire contract-based engineers as needed for its
performance under this Agreement.

 

4.6                                 Exclusivity. Each
Developer shall not, during the term of this Agreement, the JVA or for a
two (2) year period thereafter, (a) engage in or otherwise participate
in (i) product development activities with or on behalf of any third party that
are the same as the activities set forth in the Development Plan, or (ii) development of
any product that is the same (or performs a substantially similar function
using adipose tissue) as the Final Product(s), or (b) enter into any
agreement or understanding with any third party to engage in or otherwise
participate in such development activities. For the avoidance of doubt, this
Section 4.6 is and remains subject to the reservation of rights by Cytori set
forth in Section 2.1.5 of the License/ Commercial Agreement.

 

4.7                                 Regulatory
Filings. The Parties shall discuss in good faith the responsibilities of each
Party with respect to all appropriate, prudent and necessary governmental
filings, including, without limitation, Japan’s Yakuji application, Food and
Drug Administration applications and CE mark applications, provided
that, in cooperation and collaboration with Olympus, Cytori shall be
responsible for using commercially reasonable efforts to seek Food and Drug
Administration approval in the Licensed Field for the Prototype of Celution set
forth in Schedule 1 of the Joint Venture Agreement.

 

4.8                                 Manufacturing
Capabilities. Olympus (or a third party acting on behalf of
Olympus) shall be responsible for acquiring and/or developing all
necessary Final Product(s) manufacturing capabilities, including equipment and
facilities, as provided in the Development Plan.

 

4.9                                 Responsibilities.
The
Parties agree and acknowledge that each Developer shall be solely
responsible for

 

 

the
performance of its respective duties and responsibilities set forth in this Agreement
and the Development Plan. Except as otherwise set forth in this
Agreement, neither Developer shall have any liability whatsoever with
respect to any failure by the other Developer to fulfill its obligations under this
Agreement and the Development Plan in a timely manner. Without limiting
the generality of the foregoing, the Parties agree and acknowledge that neither Developer
shall be responsible to the other Developer or to NewCo for any
delays in meeting any milestones or other agreed upon development schedule or
objectives, if such delay is caused by the other Developer or by NewCo’s
failure to perform its obligations in a timely fashion.

 

SECTION 5

ACCEPTANCE

 

5.1                                 Acceptance
by NewCo. NewCo shall conduct the Acceptance Procedures at its sole cost and
expense. NewCo shall complete all the Acceptance Procedures within ninety (90)
days from its receipt of each proposed Final Product from the Developers. NewCo
shall record the results of all Acceptance Procedures in sufficient detail and
on appropriate logging sheets, and shall provide such results to the Developers
within thirty (30) days after the conclusion thereof.

 

5.2                                 Issuance of
Acceptance Certificate. If Acceptance Procedures conducted by NewCo pursuant
to Section 5.1 indicate that the relevant Specifications have been satisfied
within the tolerances set forth in the Acceptance Procedures, then NewCo shall,
within ten (10) days after the conclusion of such Acceptance Procedures, issue
an appropriate Acceptance Certificate to the Developers. The Acceptance
Certificate shall be conclusive evidence of NewCo’s acceptance and
acknowledgment of the satisfaction of the Specificationswithin the tolerances
set forth in the Acceptance Procedures, and shall be binding upon NewCo
for all purposes. If NewCo fails to conduct the Acceptance Procedures and/or fails to
inform the Developers of the results thereof in accordance with and within the
timeframes specified in the Acceptance Procedures, an Acceptance Certificate
shall be deemed to have been issued by NewCo.

 

SECTION 6

PAYMENT FOR DEVELOPMENT
ACTIVITIES

 

6.1                                 Payment by NewCo
to Olympus. For and in consideration of the development activities
to be undertaken by Olympus hereunder, NewCo shall, within ninety (90) days of
the Effective Date, pay to Olympus the Olympus Development Fees in immediately
available funds, by wire transfer to the bank account designated by Olympus.

 

6.2                                 Payment by
NewCo to Cytori. For and in consideration of the development
activities undertaken by Cytori, and upon receipt by Cytori of the EC design
examination certificate in accordance with Annex II of Directive93/42/EEC (“CE
Mark”) for the Prototype Celution Device (as described in Exhibit 1C),
NewCo shall immediately pay to Cytori the Cytori Development Fee.

 

SECTION 7

OWNERSHIP OF INTELLECTUAL
PROPERTY RIGHTS

 

7.1                                 Ownership.
All
Intellectual Property Rights arising from the joint research and development of
Licensed Product(s) under this Agreement, including the transferability
thereof, shall be as set forth on Exhibit 7.1.

 

 

7.2                                 Cytori IP
Outside of the Licensed Field. The Parties agree and acknowledge
that all Intellectual Property Rights in and to the Cytori IP outside of the Licensed Field,
if any, shall at all times belong exclusively to Cytori.

 

SECTION 8

DELIVERY

 

8.1                                 Delivery of the Deliverables.
The
Developers shall deliver any and all Deliverables to NewCo in accordance with
and in the manner set forth in the Development Plan.

 

SECTION 9

REPORTING

 

9.1                                 Reporting.
Each
Developer shall provide to the other Parties project progress reports, as set
forth in the Development Plan.

 

SECTION 10

REPRESENTATIONS AND WARRANTIES

 

10.1                           Olympus Representations and Warranties.
Olympus
represents and warrants to each of Cytori and NewCo that:

 

10.1.1                  It is a corporation duly organized,
validly existing and in good standing under the laws of its place of
incorporation, and that it has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement, and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Agreement;

 

10.1.2                  The execution, delivery and
performance of this Agreement by it will not result in any breach or violation
of, or conflict with, any contract, agreement, undertaking, judgment, decree,
order, law, regulation or rule to which it is a party, or by which it or any of
its assets are bound; and

 

10.1.3                  This Agreement has been duly and validly
executed and delivered by it and is binding upon and enforceable against it in
accordance with its terms, except as enforceability may be limited or affected
by applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the rights of creditors and except as
enforceability may be limited by rules of law governing specific performance,
injunctive relief or other equitable remedies.

 

10.2                           Cytori Representations and
Warranties. Cytori represents and warrants to each of Olympus and NewCo that:

 

10.2.1                  It is a corporation duly organized,
validly existing and in good standing under the laws of its place of
incorporation, and that it has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Agreement;

 

10.2.2                  The execution, delivery and
performance of this Agreement by it will not result in any breach or violation
of, or conflict with, any contract, agreement, undertaking, judgment, decree,
order, law, regulation or rule to which it is a party, or by which it or any of
its assets are bound; and

 

 

10.2.3                  This Agreement has been duly and
validly executed and delivered by it and is binding upon and enforceable
against it in accordance with its terms, except as enforceability may be
limited or affected by applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the rights of
creditors and except as enforceability may be limited by rules of law governing
specific performance, injunctive relief or other equitable remedies.

 

10.3                           Cytori Intellectual Property. Cytori represents
and warrants that it owns, or has the right to use, any and all Cytori IP which
is or may be used in the performance of its obligations under this Agreement.

 

10.4                           Olympus Intellectual
Property. Olympus represents and warrants that it owns, or has the right to
use, any and all Olympus IP which is or may be used in the performance of its
obligations under this Agreement.

 

SECTION
11

 

INDEMNIFICATION

 

11.1                           Indemnification. Each
Party (“Indemnifying Party”) agrees
to indemnify, defend and hold harmless each other Party (“Indemnified
Party”), together with such other Party’s officers, directors, shareholders,
employees, agents or affiliates, from and against any and all damages,
losses, liabilities, costs and expenses, whether or not involving a third party
claim, including, but not limited to, legal fees and reasonable attorney costs,
interest, penalties and disbursements, asserted against, resulting to, imposed
upon or incurred by the Indemnified Party, its officers, directors, shareholders, employees,
agents or affiliates, by reason of or resulting from a breach by
the Indemnifying Party of any of its obligations or its representations and
warranties under this Agreement.

 

11.2                           Cytori
Intellectual Property Indemnification Obligation. In
addition to the indemnification obligations set forth in Section 11.1, Cytori
shall indemnify Olympus, NewCo and their respective officers, directors, shareholders, employees,
agents or affiliates (the “Olympus Indemnitees”), from and against any and
all damages, losses, liabilities, costs and expenses, whether or not involving
a third party claim, including, but not limited to, legal fees and reasonable
attorney costs, interest, penalties and disbursements, and royalities or other license payments, asserted
against, resulting to, imposed upon or incurred by the Olympus Indemnitees in any
manner arising out of, in connection with, with respect to or relating to any Intellectual
Property
Rights
infringement claims asserted or claimed by a third party(ies) asserting
infringement of such third party’s(ies’) Intellectual Property Rights or any
other proprietary right by use or practice of the Cytori IP.

 

11.3                           Olympus
Intellectual Property Indemnification Obligation. In
addition to the indemnification obligations set forth in Section 11.1, Olympus
shall indemnify Cytori, NewCo and their respective officers, directors, shareholders, employees,
agents or affiliates (the “Cytori Indemnitees”), from and against any and
all damages, losses, liabilities, costs and expenses, whether or not involving
a third party claim, including, but not limited to, legal fees and reasonable
attorney costs, interest, penalties and disbursements, asserted against,
resulting to, imposed upon or incurred by the Cytori Indemnitees in any
manner arising out of, in connection with, with respect to or relating to any Intellectual
Property
Rights
infringement claims asserted or claimed by a third party(ies) asserting
infringement of such third party’s(ies’) Intellectual Property Rights or any
other proprietary right by use or practice of the Olympus IP.

 

11.4                           Developers
Intellectual Property Indemnification Obligation. In
addition to the indemnification obligations set forth in Section 11.1, the
Developers shall jointly and severally indemnify NewCo and its officers, directors, shareholders,
employees or agents (the “NewCo Indemnitees”), from and against any and
all damages, losses, liabilities, costs and expenses, whether or not involving
a third party claim, including, but not limited to, legal fees and reasonable
attorney costs, interest, penalties and disbursements, asserted

 

 

against,
resulting to, imposed upon or incurred by the NewCo Indemnitees in any manner
arising out of, in connection with, with respect to or relating to any Intellectual
Property
Rights
infringement claims asserted or claimed by a third party(ies) asserting
infringement of such third party’s(ies’) Intellectual Property Rights or any
other proprietary right by manufacture, use or practice of the Final
Product(s), but specifically excluding such claims that are provided for under
Sections 11.2 and 11.3.

 

11.5                           Administration of Indemnification. For purposes of administering the
indemnification provisions set forth in Sections 11.1, 11.2, 11.3 and
11.4, the following
procedure shall apply:

 

11.5.1                  Whenever a claim (each, an “Indemnity
Claim”) shall arise for indemnification under this Section 11.5,
the Indemnified Party shall, reasonably promptly after
acquiring knowledge of the Indemnity Claim, give written notice (each, an “Indemnity Claim Notice”) to the Indemnifying Party, Cytori, Olympus or the
Developers, as the case may be, setting forth in reasonable detail, to the extent
then available, the facts concerning the nature of the Indemnity Claim and the
basis upon which the Indemnified Party, Cytori, Olympus or the Developers, as the case may be, believes that it is entitled to
indemnification under this Section 11.

 

11.5.2                  In the event of any Indemnity Claim resulting from or
in connection with any claim by a third party, the Indemnifying Party, Cytori, Olympus or the Developers, as the case may
be, shall be
entitled, at its sole expense, either (a) to participate in defending against
such claim or (b) to assume the entire defense with counsel who is selected by
it and who is reasonably satisfactory to the Indemnified Party, Cytori Indemnitees or Olympus Indemnitees, as the
case may be, provided
that (A) the Indemnifying Party, Cytori, Olympus or the Developers, as the case may be, agrees in writing that it does not and
will not contest its responsibility for indemnifying the Indemnified Party, Cytori Indemnitees or Olympus Indemnitees, as the
case may be, in
respect of such claim or proceeding, and (B) no settlement shall be made and no
judgment consented to without the prior written consent of the Indemnified
Party, Cytori Indemnitees or Olympus
Indemnitees, as the case may be, which consent shall not be unreasonably withheld,
conditioned or delayed (except that no such consent shall be required if the
claimant is entitled under the settlement to only monetary damages actually
paid by the Indemnifying Party, Cytori, Olympus or the Developers, as the case may be). If, however, (i) the claim, action,
suit or proceeding would, if successful, result in the imposition of damages
for which the Indemnifying Party, Cytori, Olympus or the Developers, as the case may be, would not be responsible, or (ii)
representation of both the Indemnified Party, Cytori Indemnitees or Olympus Indemnitees, as the case may be, and the Indemnifying
Party, Cytori, Olympus or the Developers, as
the case may be, by
the same counsel would otherwise be inappropriate due to actual or potential
differing interests between them, then the Indemnifying Party, Cytori, Olympus or the Developers, as the case may
be, shall not be
entitled to assume the entire defense, and each Party shall be entitled to
retain counsel who shall cooperate with one another in defending against such
claim. In the case of item (i) of the preceding sentence, the
Indemnifying Party, Cytori, Olympus
or the Developers, as the case may be, shall be obligated to bear only that portion of the
expense of the Indemnified Party’s, Cytori’s, Olympus’ or the Developers’, as the case may be, counsel that is in proportion to the
claimed damages indemnifiable by the Indemnifying Party, Cytori, Olympus or the Developers, as the case may
be, compared to the
total amount of the third-party claim against the Indemnified Party, Cytori Indemnitees or Olympus Indemnitees, as the
case may be.

 

11.5.3                  If, within ten (10) days after receipt of an Indemnity
Claim Notice, the Indemnifying Party, Cytori, Olympus or the Developers, as the case may be, fails to give the Indemnified Party, Cytori Indemnitees or Olympus Indemnitees, as the
case may be, written
notice of the Indemnifying Party’s, Cytori’s, Olympus’ or the Developers’, as the case may
be, election to
undertake the defense of the related Indemnity Claim, or if the Indemnifying
Party, Cytori, Olympus or the Developers, as
the case may be,
subsequently fails to diligently prosecute such defense, the Indemnified Party, Cytori Indemnitees or Olympus Indemnitees, as the
case may be, may
defend in such manner as it reasonably deems appropriate or settle the claim
(after giving notice thereof to the Indemnifying Party, Cytori, Olympus or the Developers, as the case may
be) on

 

 

such
terms as the Indemnified Party, Cytori Indemnitees or Olympus Indemnitees, as the case may be, may deem appropriate, and the
Indemnified Party, Cytori
Indemnitees or Olympus Indemnitees, as the case may be, shall be entitled to periodic
reimbursement of defense expenses incurred and prompt indemnification from the
Indemnifying Party, Cytori, Olympus
or the Developers, as the case may be, in accordance with this Section 11.

 

11.5.4                  Failure or delay by an Indemnified Party, Cytori Indemnitees or Olympus Indemnitees,
as the case may be, to
give a reasonably prompt notice of any Indemnity Claim (if given prior to
expiration of the applicable Survival Period) shall not release, waive or
otherwise affect an Indemnifying Party’s, Cytori’s, Olympus’ or the Developers’, as the case may
be, obligations with
respect to the Indemnity Claim, except to the extent that the Indemnifying
Party, Cytori, Olympus or the Developers, as
the case may be, can
demonstrate actual loss or prejudice as a result of such failure or delay.

 

11.6                           This
Section 11 shall survive the expiration or sooner termination of this
Agreement, and shall continue for a period of five (5) years from the date of
expiration or sooner termination hereof, as applicable (the “Survival Period”).

 

SECTION
12

LIMITATION
ON RECOVERABLE DAMAGES

 

12.1                           Limitation
of Liability.

 

TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL ANY PARTY BE
LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY NATURE (INCLUDING, BUT NOT LIMITED TO,
DAMAGES FOR LOSS OF BUSINESS, LOSS OF PROFIT OR REVENUES, LOSS OF USE OF THE
PRODUCTS OR ANY ASSOCIATED EQUIPMENT, COST OF CAPITAL, COST OF SUBSTITUTE
PRODUCTS, FACILITIES OR SERVICE, DOWNTIME, PERSONAL PROFITS, BUSINESS
INTERRUPTION, OR ANY OTHER PECUNIARY LOSS) ARISING OUT OF OR IN ANY WAY RELATED
TO THE PARTIES’ PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT, WHETHER
SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING NEGLIGENCE
OR STRICT LIABILITY) OR OTHERWISE, EVEN IF THE OTHER PARTY HAS BEEN WARNED OF
THE POSSIBILITY OF SUCH DAMAGES.  EXCEPT TO THE EXTENT SPECIFICALLY
PROVIDED OTHERWISE IN THIS AGREEMENT, ALL REMEDIES PROVIDED FOR HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO TERMINATE THIS AGREEMENT AND ALL OF
THE REMEDIES PROVIDED BY LAW (AND NOT EXCLUDED PURSUANT TO THE FOREGOING
SENTENCE), SHALL BE DEEMED CUMULATIVE AND NON EXCLUSIVE.

 

SECTION 13

FURTHER RIGHTS UPON TERMINATION

 

13.1                           Accrued
Liabilities. The expiration or earlier termination of this Agreement for
any cause shall not release any Party hereto from any liability which, at the
time of such expiration or termination, has already accrued against such Party
(or which thereafter may accrue against such Party in respect of any act or
omission occurring prior to such expiration or termination), nor shall any such
expiration or termination of this Agreement affect in any way the survival of
any right, duty or obligation of any Party hereto which is

 

 

expressly stated elsewhere in this Agreement to
survive expiration or earlier termination hereof.

 

SECTION 14

MISCELLANEOUS PROVISIONS

 

14.1                           Export
Regulations. Each Party shall be responsible for observing and abiding
by any and all export control laws and regulations (including, without
limitation, any and all costs associated therewith) applicable to the Cytori
IP, Olympus IP, NewCo IP, the Deliverables and/or the Final Product(s), as applicable.

 

14.2                           Governing Law. This Agreement shall be governed in all respects by the laws of New York
without regard to provisions regarding choice of laws.

 

14.3                           Dispute Resolution. All disputes arising out of or in connection
with this Agreement, or any relationship created by or in accordance with this
Agreement, shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce (the “Rules”) by
three arbitrators. Judgment on the award rendered by the panel of arbitrators
shall be binding upon the Parties and may be entered in any court having
jurisdiction thereof. Olympus shall nominate one arbitrator and Cytori shall
nominate one arbitrator. The arbitrators so nominated by Cytori and Olympus,
respectively, shall jointly nominate the third arbitrator within fifteen (15)
days following the confirmation of arbitrators nominated by Cytori and Olympus.
If the arbitrators nominated by Cytori and Olympus cannot agree on the third
arbitrator, then such third arbitrator shall be selected as provided in the
Rules. The place of the arbitration and all hearings and meetings shall be in
Singapore unless the parties to the arbitration otherwise agree. In addition to
the Rules and except as otherwise provided herein, the Parties agree that the
arbitration shall be conducted according to the International Bar Association
Rules on the Taking of Evidence in International Commercial Arbitration. The
arbitrators may order pre-hearing production or exchange of documentary
evidence, and may require written submissions from the relevant parties hereto,
but may not otherwise order pre-hearing depositions or discovery. The
arbitrators shall apply the laws of the state of New York as set forth in this Section 16.3; provided, however, that the Federal Arbitration Act shall govern. The
language of the arbitral proceedings shall be English. The arbitrators shall
not issue any award, grant any relief or take any action that is prohibited by
or inconsistent with the provisions of this Agreement.

 

No arbitration pursuant to
this Section 16.3
shall be commenced until the Party intending to request arbitration has first
given thirty (30) days written notice of its intent to the other Party or
Parties, as the case may be, and
has offered to meet and confer with one or more responsible executives of such
other Party or Parties, as the case may be, in an effort to resolve the dispute(s) described in detail in such written
notice. If one or more of such responsible executives agree, within thirty (30)
days after receipt of such written notice, to meet and confer with the
requesting Party, then no arbitration shall be commenced until the Parties have
met and conferred in an effort to resolve the dispute(s) or until sixty (60)
days have elapsed from the date such written notice has been given.

 

14.4                           Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
Parties hereto whose rights or obligations hereunder are affected by such
amendments. Neither this Agreement nor any right, license, privilege or
obligation provided herein may be assigned or transferred by either Party
without the other Party’s prior written consent, and any such assignment or
transfer shall constitute a Change of Control of either Cytori or Olympus.

 

14.5                           Entire Agreement. This Agreement, including the attachments,
schedules and exhibits hereto and the Ancillary Agreements contemplated by the
JVA, all of which are hereby expressly incorporated herein by this reference,
together with the Confidentiality Agreement (as defined in the JVA),
constitutes the entire

 

 

understanding and agreement
among the Parties with regard to the subject matter hereof; and supersedes in its entirety all prior agreements and
understandings, express or implied, oral or written among them with respect
thereto. No alteration, modification, interpretation or amendment of this
Agreement shall be binding on the Parties unless in writing designated as an
amendment hereto, and executed with equal formality by each of the Parties.

 

14.6                           Notices. Except as may be otherwise provided herein, all notices, requests,
waivers and other communications made pursuant to this Agreement shall be in
writing and shall be conclusively deemed to have been duly given (a) when hand
delivered to the other Party(ies); (b) when received, if sent by facsimile at
the address and number set forth below, with a written confirmation copy of
such facsimile sent the next business day in accordance with (c) below; (c) the
third business day after deposit
with an international
courier service, postage prepaid,
addressed to the other Party(ies) as set forth below, provided that the sending Party receives a confirmation
of delivery from the courier
service provider, or (d) if earlier, when actually received.

 

	
  To Cytori:

  	
   

  	
  To Olympus: 

  
	
   

  	
   

  	
   

  
	
  3020 Callan Road, San Diego, CA 92121,

  U.S.A.

  	
   

  	
  2-3
  Kuboyama-cho,

  Hachioji-shi, Tokyo,
  192-8512,
  Japan

  
	
   

  	
   

  	
   

  
	
  Attn: Christopher J. Calhoun

  	
   

  	
  Attn: Yasunobu Toyoshima

  
	
  Fax: 858-458-0995

  	
   

  	
  Fax: +81-426-91-7350

  
	
   

  	
   

  	
   

  
	
  To NewCo:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3020 Callan Road, San Diego, CA 92121,

  U.S.A.

  	
   

  	
  2-3
  Kuboyama-cho,

  Hachioji-shi, Tokyo, 192-8512, Japan

  
	
   

  	
   

  	
   

  
	
  Attn: Christopher J. Calhoun

  	
   

  	
  Attn: Masaaki Terada

  
	
  Fax: 858-458-0995

  	
   

  	
  Fax: +81-426-91-7350

  

 

A Party hereto may change or
supplement its address set forth above, or may designate additional addresses,
for purposes of this Section 16.6 by giving the other Parties hereto written notice of the new address in the manner set forth above.

 

14.7                           Amendments and Waivers. No term or provision of this Agreement
may be amended, waived, discharged or terminated orally but only by an
instrument in writing signed by the Party against whom the enforcement of such
amendment, waiver, discharge or termination is sought. Any waiver shall be
effective only in accordance with its express terms and conditions.

 

14.8                           Cumulative Remedies. Unless expressly so stated in this Agreement
in respect of any particular right or remedy, the rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies provided by
law.

 

14.9                           Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

 

14.10                 Relationship of Parties. This Agreement shall not be deemed to
constitute any Party, the agent, the
partner, the licensee, the affiliate or the representative of another Party, and a Party shall not represent to
any third party that it has any such relationship or right of representation.

 

 

14.11                 Press Release. No public announcements or press releases shall be issued by any Party regarding this Agreement or any of the
activities engaged in by the Parties pursuant to this Agreement, the JVA and/or
any Ancillary Agreement without the prior written approval of the other Parties; provided, however, that any Party shall have the right to make such public
disclosure as may be necessary or appropriate to comply with applicable
securities or other laws.

 

14.12                 Counterparts. This Agreement may be executed by facsimile signature in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

 

14.13                 Severability. Should any provision of this Agreement be determined to be illegal or
unenforceable, such determination shall not affect the remaining provisions of
this Agreement.

 

 

IN WITNESS WHEREOF, the Parties
have executed this License/ Joint Development Agreement as of the Effective
Date.

 

 

	
  CYTORI THERAPEUTICS, INC.

  	
  Olympus Corporation

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Christopher J. Calhoun

  	
   

  	
  By: 

  	
  /s/ Tsuyoshi Kikukawa

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title: CEO

  	
  Title: President

  
	
   

  	
   

  
	
  Date: November 4, 2005

  	
  Date: November 4, 2005

  
	
   

  	
   

  
	
  OLYMPUS-CYTORI,
  INC.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/
  Masaaki Terada

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title: CEO

  	
   

  
	
   

  	
   

  
	
  Date: November 4, 2005EXHIBIT
10.30

 

SHAREHOLDERS
AGREEMENT

 

THIS SHAREHOLDERS
AGREEMENT (this “Agreement”),
is entered into as of this  4th 
day of November, 2005, (the “Effective Date”),
by and among CYTORI, THERAPEUTICS, INC. (formerly MACROPORE BIOSURGERY, INC.),
a Delaware corporation with its principal place of business located at #3020
Callan Road, San Diego, CA 92121, U.S.A. (“Cytori”), and OLYMPUS CORPORATION,
a Japanese corporation with its principal office at 2-43-2 Hatagaya Shibuya-ku,
Tokyo, Japan] (“Olympus”).

 

(Cytori and Olympus may
each be individually referred to herein as a “Shareholder”
and collectively as the “Shareholders”.)

 

RECITALS

 

A. Cytori has acquired
and possesses, through the expenditure of considerable time, effort and money,
certain intellectual property rights (including patents, patent applications
and technical information) to regenerative cell technology, including
scientific equipment used to carry out regenerative cell therapies and
treatments.

 

B. Olympus is a leading
developer and manufacturer of medical and scientific equipment and has acquired
and possesses, through the expenditure of considerable time, effort and money,
certain intellectual property rights (including patents, patent applications
and technical information) related to medical and scientific equipment.

 

C. Olympus and Cytori
entered into a confidentiality agreement dated November 30, 2004 (the “Confidentiality Agreement”).

 

D. Olympus and Cytori entered into a stock purchase
agreement dated April 28, 2005 pursuant to which Olympus acquired 1,100,000
common shares of Cytori.

 

E. Olympus and Cytori
entered into a Joint Venture Agreement dated as of November 4, 2005 (the “JVA”) that, among other things,
sets forth the terms and conditions on which Olympus will purchase shares of NewCo
stock so that NewCo will be equally owned by Cytori and Olympus.

 

F. In accordance with
Sections 7 and 8 of the JVA, the Shareholders and NewCo desire to enter into
this Agreement to set forth, among other things, certain terms regarding the
operation and management of NewCo.

 

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

 

SECTION 1

DEFINITIONS

 

1.1           Defined Terms. As used in this Agreement, all capitalized terms shall
have the meanings ascribed to them as set forth in Attachment 1.

 

1.2           References.
In this Agreement, a reference to:

 

(a)           A
Section, Sub-section, Recital, Attachment, Schedule or Exhibit is, unless the
context otherwise requires, a reference to a section or sub-section of, or a
recital, schedule or exhibit to, this Agreement;

 

 

(b)           This
Agreement (or any specific provision hereof) or any other document shall be
construed as references to this Agreement, that provision or that other
document as amended, varied or modified from time to time; and

 

1.3           Headings.
Headings in this Agreement are for ease of reference only and shall not affect
the interpretation or construction of this Agreement.

 

1.4           Attachments,
Schedules and Exhibits. The Attachments, Schedules and Exhibits attached
hereto form a part of this Agreement.

 

1.5           Construction.
In construing this Agreement, words denoting the singular include the plural
and vice versa and words denoting one gender include all genders.

 

SECTION 2

SHAREHOLDER MEETINGS

 

2.1                General Principles. The
Shareholders agree to (i) take all actions reasonably necessary, including,
without limitation, voting their Shares, to cause NewCo to be managed in
accordance with the terms of this Agreement, and (ii) use their reasonable
commercial efforts, including, without limitation, voting their Shares, to
cause NewCo to timely satisfy, perform and fulfill all of its obligations set
forth in this Agreement. The Shareholders acknowledge that the provisions of
this Section 2 shall in no way affect or diminish their obligations arising
pursuant to any and all other sections of this Agreement. NewCo
shall, at all times and in good faith, cooperate and assist in performing all
the provisions of this Agreement, and shall take all such actions as may be
necessary or appropriate in order to effectuate the provisions and intentions
of this Agreement.

 

2.2                Shareholders’ Meetings.

 

(c)           Meetings. Meetings
of the Shareholders shall be held regularly (and in any event not less than
once every year) and at any time upon the written request of any Shareholder
given to the other Shareholder. NewCo shall give not less than forty five (45)
days’ written notice to each Shareholder of the date, time, location, agenda
and means of communication of each of meeting of the Shareholders. Unless
otherwise agreed by the Shareholders, all such meetings shall be conducted in
English and shall take place at 3020 Callan Road, San Diego, CA 92121, U.S.A., and
may be held by means of teleconference or video conference.

 

(f)            Quorum. In
order for resolutions of a Shareholders’ meeting to be valid, there must be
represented, in person or by proxy, at any such meeting a quorum consisting of
seventy-five percent (75%) of the total issued and outstanding Shares, unless
or except to the extent the representation of a greater percentage of the
issued and outstanding Shares is required by Laws.

 

(g)           Shareholders’
Resolutions. Other than those matters requiring approval
by both Shareholders set forth in Section 2.2(d) below, all actions and
resolutions of the Shareholders at a Shareholders’ meeting shall be made by the
requisite vote provided under the laws of the State of Delaware or as otherwise
provided in the Certificate of Incorporation. Any such votes by a Shareholder
shall be lawfully cast at a duly convened meeting by the holders of the Shares
present in person, or by telephone or audio/video conference, or by proxy. Shareholders
shall have one vote for each Share that it owns. A resolution in writing signed
by duly authorized representatives of each Shareholder shall be treated in all
respects as if such resolution had been made at a duly convened meeting of the
Shareholders. Resolutions
of the Shareholders may be passed without a meeting

 

 

through
written consents of each Shareholder that are duly executed by the duly
authorized representative of each respective Shareholder.

 

(h)           Matters
Requiring Approval of Both Shareholders. The following
matters require the approval of both Shareholders. Provided however, that the
approval by Olympus shall only be deemed to have been given upon delivery of
Olympus in writing that is duly signed by the then current president. To the extent
approval of both Shareholders is not obtained for any such matter, each
Shareholder shall, and NewCo shall, use its best efforts to prevent such matter
from being effectuated by or with regard to NewCo.

 

(i)            any
amendment to the Certificate of Incorporation or any amendment, adoption or
repeal of By-Laws;

 

(ii)           any
reorganization, merger (whether or not NewCo is the surviving company),
liquidation, migration, dissolution, consolidation or sale or similar
disposition of all or substantially all of the assets of NewCo;

 

(iii)          any
initial public offering of Shares;

 

(iv)          except
as specifically provided in Section 4.4, any private placement or issuance, sale, transfer, pledge,
encumbrance or other disposal of any capital stock, voting securities, or any
other equity interest in NewCo, or grant, permit or otherwise authorize any
option, agreement, arrangement, commitment, understanding or other right
pursuant to which any third party has the right or ability to acquire, split,
reclassify or change the rights and privileges of, or redeem, repurchase or
otherwise acquire (whether pursuant to any employee stock option plan or
otherwise) any equity interest in NewCo;

 

(v)           any
declaration or payment of a dividend or distribution in the form of assets
other than cash, or of any cash dividend which is extraordinary in size or
timing;

 

(vi)          subject
to Section 2.3(d), removal of directors of NewCo, other than by the Shareholder
which appointed the director to be removed;

 

(vii)         election
or removal of NewCo’s independent auditors;

 

(viii)        any
borrowing of money or issuance of any debt instrument or guaranty by NewCo;

 

(ix)           any
change of NewCo’s fiscal year;

 

(x)            conducting
any business other than the Business;

 

(xi)           any
contract or transaction with a Shareholder or an Affiliate of a Shareholder;

 

(xii)          any
license-out, sublicense-out or assignment of any Intellectual Property Rights,
or any disclosure of proprietary information is such a way as to prevent a
future claim of trade secret status;

 

(xiii)         any
capital expenditure (or series of related capital expenditures) above $250,000;

 

(xiv)        any
change in the authorized number of directors of NewCo;

 

(xv)         any
formation of any Affiliate entity;

 

 

(xvi)        any
acquisition of any equity interest in or transfer of any assets or rights to
any entity which is, after the transaction, an Affiliate of Newco;

 

(xvii)       any
security interest in any NewCo asset; or

 

(xviii)      any
Insolvency filing.

 

2.3           Board of Directors.

 

(a)           Composition Board of
Directors. NewCo shall be managed by a board of directors of NewCo
(the “Board of
Directors”),
which shall consist of five (5) directors (each, a “Director” and collectively the “Directors”). Olympus shall have the right to
appoint three (3) Directors (“Olympus Director(s)”) and Cytori shall have the right to appoint
two (2) Directors (“Cytori Director(s)”). The right of a Shareholder to appoint Directors
under this Section 2.1 shall be subject to such Shareholder retaining at least
[thirty percent (30%)] of the then issued and outstanding Shares (including its
Affiliates’ holdings) (the “Threshold Percentage”).
If a Shareholder’s
holdings of Shares (including its Affiliates’ holdings) falls below the
Threshold Percentage, then such Shareholder shall only have the
right to appoint one (1) Director under this Section 2.1, and the other Shareholder shall have right to
appoint all other Directors. The initial Cytori Directors and the initial Olympus Directors shall be
as provided for in Schedule
2.3(a). The Shareholders shall, promptly following the Effective Date, but
in no event later than thirty (30) days following the Effective Date, vote
their respective Shares and take all other actions necessary to elect the
initial Olympus Directors and the initial Cytori Directors so that following
such election of the initial Olympus Directors and the initial Cytori
Directors, the Directors will be composed of the directors listed in Schedule
2.3(a).

 

(i)            Right to Removal and Replacement. Each Shareholder shall have the right,
exercisable in its sole discretion and with or without cause, to remove and
replace at any time, any Director appointed by it pursuant to Section 2.3(a). For
the avoidance of doubt, the Shareholders shall vote their respective Shares to
effectuate any such removal and/or replacement.

 

(j)            Fitness of Appointed Directors. Neither NewCo, the Shareholders, nor
any officer, director, shareholder, partner, employee or agent of such party,
makes any representation or warranty as to the fitness or competence of the
appointee of any Shareholder hereunder to serve on the Board of Directors by
virtue of such party’s execution of this Agreement or by the act of such party
in voting for such appointee pursuant hereto.

 

(k)           Removal Pursuant to Laws. Any Director may be removed for cause
in accordance with applicable Laws.

 

(l)            Chairman. Olympus shall appoint the chairman of the
Board of Directors (“Chairman”).

 

(m)          Quorum. No
business shall be transacted at any meeting of the Board of Directors unless
there shall be present throughout such meeting a quorum of Directors. Attendance
by four (4) Directors
at a meeting of the Board of Directors shall constitute a quorum for the
transaction of business thereat. If a quorum does not exist for any duly
noticed meeting of the Board of Directors, the Directors in attendance at such
meeting shall re-schedule the meeting for a date no earlier than three (3)
weeks after such meeting and notify each Directors of such rescheduled meeting.
For such re-scheduled meeting of the Board of Directors three (3) members of
the Board of Directors in attendance shall constitute a quorum for the
transaction of business thereat.

 

(n)           Board of Directors’
Meetings. Board of Directors’ meetings shall be conducted in English and held in
accordance with the laws of State of Delaware and convened no less than once
each calendar

 

 

quarter
unless otherwise agreed by the Shareholders. Not less than fourteen (14) days
notice (or such other period of notice as may be agreed from time to time by
the Shareholders) of each meeting of the Board of Directors specifying the
date, time and place of the meeting and business to be transacted thereat shall
be given to all Directors. Directors may participate and vote in person, by
telephone or by audio/video conference. The dates and places of Board of
Directors meetings shall be agreed upon by the Directors (or, in the case of a
re-scheduled meeting, by the Directors in attendance at a Board of Directors
meeting for which a quorum did not exist) or, in the absence of such agreement,
by the Chairman in accordance with By-Laws.

 

(o)           Board of Directors’ Resolutions. All actions taken at a meeting of the
Board of Directors shall be by the requisite vote provided under the laws of
the State of Delaware. Resolutions of the Board of Directors may be passed
without a meeting by unanimous written resolution executed by all Directors. All matters that
do not require unanimous approval of the Shareholders as provided under Section
2.2(d) or Shareholders’ approval under the laws of the state of Delaware may be
determined by Board of Directors’ resolution.

 

(p)           Remuneration of Directors. The remuneration (if any) of the Directors
shall be determined by, and subject to the approval of, both Shareholders.

 

(q)           Attendance by Invitees. If the Board so authorizes or requests, auditors,
consultants, advisers and employees shall be permitted to attend and speak at
meetings of the Board, but not to vote.

 

2.4           Officers.

 

(a)           Appointment of Officers. Unless otherwise agreed by the Shareholders, each
Shareholder shall have the right to nominate officers in accordance with Schedule
2.4(a). Each Shareholder shall procure that each of its appointed Directors
shall take the necessary and appropriate actions, including, without
limitation, voting at Board of Directors meetings, to effectuate the
appointment of the persons so nominated.

 

(r)            Removal of Officers. Each Shareholder shall have the right, exercisable
in its sole discretion and with or without cause, to remove and replace at any
time, any officer nominated by it pursuant to Section 2.4(a). Each Shareholder
shall procure that each of its appointed Directors shall take the necessary and
appropriate actions, including, without limitation, voting at Board of
Directors meetings, to effectuate any such removal or replacement of an officer
pursuant to this Section 2.4(b).

 

2.5           Company
Name.

 

(a)           Deletion
of “Olympus”. If Olympus either: (i) in its sole discretion informs the other
Shareholder(s) of its desire to cease use by NewCo of any Olympus
trademarks
(whether as a trademark or in NewCo’s company name), or (ii) the shareholding
of Olympus (including its Affiliates’ holdings) becomes less than thirty
percent (30%) of the outstanding shares of NewCo, then the Shareholders shall
take and shall cause NewCo to take, all actions necessary to:

 

(i)            change
NewCo’s corporate name so as to delete “Olympus” therefrom; and

 

(ii)           cease
use of and make null and void any trademark registration owned by NewCo of
trademarks including any trademarks of Olympus,

within a reasonable period
of time, which in no event shall be longer than three (3) months from (Y) the
date on which Olympus notifies the other Shareholders of its desire for NewCo
to cease use of any Olympus trademarks, (Z) the date on which Olympus
(including its Affiliates’ holdings) no longer holds thirty percent (30%)
shareholding in NewCo.

 

 

(b)           Deletion
of “Cytori”. If Cytori either: (i) in its sole discretion informs the other
Shareholder(s) of its desire to cease use by NewCo of any Cytori trademarks
(whether as a trademark or in NewCo’s company name), or (ii) the shareholding
of Cytori (including its Affiliates’ holdings) becomes less than thirty percent
(30%) of the outstanding shares of NewCo, then the Shareholders shall take and
shall cause NewCo to take, all actions necessary to:

 

(i)            change
NewCo’s corporate name so as to delete “Cytori” therefrom; and

 

(ii)           cease
use of and make null and void any trademark registration owned by NewCo of
trademarks including any trademarks of Cytori (other than any trademark
registrations concerning the Licensed Products that do not include “Cytori”),

within a reasonable period
of time, which in no event shall be longer than three (3) months from (Y) the
date on which Cytori notifies the other Shareholders of its desire for NewCo to
cease use of any Cytori trademarks, (Z) the date on which Cytori (including its
Affiliates’ holdings) no longer holds thirty percent (30%) shareholding in
NewCo.

 

For the avoidance of doubt, NewCo
is not granted any right or authority to use trademarks including any
trademarks of Olympus and/or
Cytori unless otherwise
expressly authorized by Olympus and/or
Cytori in writing.

 

SECTION 3

OPERATION OF NEWCO

 

3.1           Purpose, Company Name and Business
Plan. The purpose of NewCo shall be to engage in the Business. The Shareholders shall cause the Board of
Directors of NewCo to adopt as its five (5) year business plan the Initial
Business Plan attached hereto as Attachment 2 (the “Initial
Business Plan”). The Shareholders intend the Initial Business
Plan to be a planning document only and not to constitute a binding commitment
of any of the parties hereto. The Shareholders shall cause the Board of
Directors to formulate each year an Annual Business Plan
in a manner that is consistent with the Initial Business Plan, with each such
Annual Business Plan to be approved by the Board of Directors in accordance
with the By-laws and Sections 2.3(f) and (h), and if an Annual Business Plan
would result in NewCo taking any of the actions set forth in Section 2.2(d),
the approval of the Shareholders shall (if given) be in accordance with
Sections 2.2(b), (c) and (d). The officers of NewCo shall through their
performance of their respective duties conduct and implement any such Annual
Business Plan so approved. The Shareholders shall procure that the Annual
Business Plan for the first fiscal year of NewCo attached hereto as Schedule
3.1, is approved and adopted by the Board of Directors within two (2)
months from the Effective Date.

 

3.2           Fiscal Year. The fiscal year of NewCo shall commence on April 1st and end on March 31st of each calendar
year.

 

3.3           Financial Statements. NewCo shall, at its cost and expense, prepare
consolidated balance sheets, profit and loss statements and statements of cash
flow on a quarterly and annual basis in accordance with US GAAP consistently
applied (and, to the extent practicable, consistent with the accounting
principles and method of presentation used in Cytori’s financial statements)
and provide copies of the same to each Shareholder within thirty (30) and
forty-five (45) days after the end of each quarterly and annual period,
respectively, as applicable. If requested by Olympus, NewCo shall, at its cost and expense, prepare consolidated balance
sheets, profit and loss statements and statements of cash flow on a quarterly
and annual basis in accordance with Japan’s accounting principals consistently applied (and, to the extent practicable, consistent with
the accounting principles and method of presentation used in Olympus’ financial statements) and provide copies of the same to each
Shareholder within thirty (30) and forty-five (45) days after the end of each
quarterly and annual period, respectively, as applicable.Annual consolidated
financial statements shall, at NewCo’s cost and expense, be audited by an
accounting firm of international standing and repute in accordance with the
generally accepted auditing principles applicable in the

 

 

United States, and the
audit report shall be provided to each Shareholder within sixty (60) days after
the end of the relevant fiscal year.

 

3.4           Reporting. In addition to
Section 3.3 and all other information to which a Shareholder may have the right
to receive under the laws of the State of Delaware, within fifteen (15) days
after the end of each month, NewCo shall, at its cost and expense, provide each Shareholder with the
following monthly unaudited financial statements: (a) balance sheet, (b) profit
& loss and (c) cash flow. Upon the reasonable request of a Shareholder,
NewCo shall, at the cost and expense of such requesting Shareholder, promptly
provide such Shareholder any additional statements and information requested by
such Shareholder (including, without limitation, such additional statements and
information as may be reasonably necessary in order for a Shareholder to comply
with its obligations under applicable Laws, including, without limitation,
securities Laws and the rules and regulations of relevant stock exchanges).

 

3.5           Rights of Inspection. The
Shareholders (subject to the Three-Way NDA) shall have the right to inspect NewCo’s books and records; provided
that (i) the fees of such inspection and all other costs associated with
such inspection shall be borne by the Shareholder conducting the inspection,
and (ii) such examination shall take place during normal business hours
and in a manner that is not disruptive to the business of NewCo.

 

3.6           Books and Records. NewCo shall
at all times maintain complete, accurate and up to date books of account and
records of all its operations and accounts, in full compliance with US GAAP. Such
books of account and records shall be retained by NewCo for at least seven (7)
years after the fiscal year to which they pertain.

 

3.7           International Accounting Firm.
The independent auditor of NewCo shall be an accounting firm of international
standing and repute, and shall be subject to the prior written approval of both
Shareholders as provided under Section 2.2(d)(vii).

 

SECTION 4

SHARES, RESTRICTIONS ON TRANSFERS, ADDITIONAL CAPITAL CONTRIBUTIONS AND
RELATED MATTERS

 

4.1           Shares. NewCo shall ensure
that all Shares shall be represented by stock certificates that shall contain
the following legend:

 

“The sale or transfer of the shares represented by
this certificate is restricted by the terms of a Shareholders’ Agreement among
Olympus-Cytori, Inc. and its Shareholders, a copy of which may be inspected at
the principal office of the Company. THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.”

 

and any additional legends that may be required by
applicable Laws.

 

 

4.2           Restrictions on Share Transfers.

 

(a)           Neither Shareholder shall sell, assign, or otherwise
transfer all or any portion of its Shares to any third party on or before               ***               .
Any and all sales, assignments and transfers of a Shareholder’s Shares after       ***         to
any third party shall be subject to this Section 4.2.

 

(s)           After         ***              ,
a Shareholder may, upon prior written consent of the other Shareholder, sell,
assign or otherwise transfer its Shares to its Affiliates that agree in writing
to assume all of the obligations of such transferring Shareholder under this
Agreement arising from and after the effective date of any such transfer (“Permitted Transfers”), provided
that such consent shall not be unreasonably withheld. In the case of any
Permitted Transfer of some or all of a Shareholder’s Shares, for all purposes
of this Agreement, all of the Shares shall be treated as if they were still
owned only by the Shareholder. The Shareholder shall procure that any of its
Affiliates which own Shares (each a “Permitted Transferee”)
shall sign written consent actions and vote consistently with the Shareholder,
in order to ensure formal compliance with corporate governance Laws.

 

(t)            Except for Permitted Transfers, any and all sale,
assignment or transfer of any Shares after             ***        shall
be subject to the following:

 

If any Shareholder (or such Shareholder’s Permitted
Transferree) proposes to sell, assign or otherwise transfer any or all of its
Shares to any Person that is not an Affiliate of such Shareholder (or if any
Person that is not an Affiliate of such Shareholder proposes to buy the Shares
held by a Shareholder), such transferring Shareholder (the “Transferor”) shall first offer the
Shares that the Transferor desires to sell (the “Offered
Shares”) to the other Shareholder (the “Offeree
Shareholder”). Such offer shall be made by delivery of a written
offer (the “Offer”), within thirty (30)
days of the original offer to or by the Transferor for the proposed transfer
setting forth: (i) a description of the proposed transfer; (ii) the name and
address of each bona fide prospective purchaser (the “Transferee”)
(including in the case of any Transferee who is not an individual, the names
and addresses of the Person(s) directly or indirectly controlling such
Transferee; and (iii) any and all other material terms (the “Terms”) of the proposed transfer,
including without limitation, the purchase price for the Offered Shares offered
by each Transferee (“Transfer Price”),
the manner in which the Transfer Price shall be paid, and the date on which
such proposed transfer will be completed or consummated. The Offeree
Shareholder may elect to purchase such Offered Shares by giving written notice
to the Transferor within forty (40) days of the date the Offeree Shareholder
received the Offer. Such written notice from the Offeree Shareholder must
indicate that the Offeree Shareholder is willing to purchase up to one hundred
percent (100%) of the Offered Shares at the Transfer Price and on the Terms (as
near as may be), or the Offeree Shareholder shall not have the right to
purchase any of the Offered Shares. If the Offeree Shareholder provides such
notice, the Offeree Shareholder shall purchase and the Transferor shall sell
the Offered Shares in accordance with the Terms. If the Offeree Shareholder
does not provide such notice within such forty (40) day period, the Transferor
may sell the Offered Shares but only in accordance with the Terms. If the
Transferor fails or is otherwise unable to consummate the transfer to the
Offered Shares in accordance with the Terms within ninety (90) days thereafter,
any subsequent proposed transfer shall be subject to this Section 4.2. In the event of any transfers of
all or substantially all (i.e., over 85%) of the Shareholder’s Shares to a
non-Affiliate pursuant to this Section 4.2(c), Transferor shall, prior to any
such transfer of Shares, deliver to the Offeree Shareholder a written document,
effective as of the date of completion of such transfer, duly and validly
executed by the proposed Transferee and Transferor, which provides that, to the
extent consistent with the number of Shares transferred:

 

(A) Transferor
assigns and delegates to Transferee all rights and obligations arising under
this Shareholders Agreement after the transfer of Shares pursuant to Section
4.2(c) (it being understood that assignor also remains responsible for its
obligations hereunder); and

 

*** Material has been omitted
pursuant to a request for confidential treatment filed separately with the
Securities and Exchange Commission.

 

 

(B) Transferee
accepts such assignment and delegation from the Transferor and agrees to become
a party to the Shareholders Agreement, entitled to any and all benefits and
advantages imposed in connection therewith, and agrees to observe, duly perform
and be liable under and bound by each and every covenant, agreement and
condition to be observed or performed under this Shareholders Agreement, as if
the Transferee was an original signatory hereto (it being understood that
assignor also remains responsible for its obligations hereunder).

 

(C) The Transferor and
Transferee agree to be jointly and severally liable for any and all liabilities
arising from or in connection with (i) Shareholders Agreement or the Ancillary
Agreement, regardless as of whether such liability arise from any circumstance,
occurrence or event that occur on, before or after the transfer of Share
pursuant to this Section 4.2 (c) and (ii) Transferror’s status as a shareholder
of NewCo prior to such transfer.

 

4.3           Additional
Capital Contributions. Neither Cytori
nor Olympus shall have any obligation to subscribe to any newly issued Shares
or make any capital contributions or to provide loans or loan guarantees to or on
behalf of NewCo, except as expressly set forth in this Agreement.

 

4.4           Future Capital Requirements. The
Shareholders anticipate that NewCo shall require additional capital and
operating funds in the future in connection with the joint venture business as
contemplated herein. Subject to Section 4.3, the Shareholders contemplate that
any such additional capital and operating funds shall be obtained from the
following sources as may be approved by both Shareholders from time to
time:  (a) loans obtained by NewCo from
appropriate banks or other lenders, (b) increases in share capital of NewCo, or
(c) loans or guarantees provided by the Shareholders, whether jointly or
separately, in proportion to their share ownership of NewCo. The details of all
such additional capital and operating funds requirements of NewCo shall be
provided for in the Annual Business Plans to be formulated in accordance with
Section 3.1, and if such Annual Business Plans call for NewCo to take any of
the actions set forth in Section 2.2(d), any such Annual Business Plan shall be
subject to the requirement of approval by both of the Shareholders in
accordance with Sections 2.2(b), (c) and (d). For all additional capital and
operating funds that the Shareholders both agree that NewCo requires, each
Shareholder shall have the right (but not the obligation) to respectively loan,
guarantee loans to or subscribe for additional equity (subject to Section
4.6(b)), as jointly agreed, in proportion to their Share ownership of NewCo.

 

4.5           Conversion Right of Guarantor.
Notwithstanding any provision to the contrary herein, in the event any debt
financing is provided by a Shareholder in favor of NewCo, then such Shareholder
shall have the right to convert any debt instrument issued to such Shareholder
into Shares of NewCo (the “Conversion”),
such Conversion to be at the per Share price at the time of such Conversion or
at the time of such loan, whichever is higher, as such per Share prices may be
determined by the appraisal method specified in Section 4.7. The other
Shareholder hereby unconditionally and irrevocably agrees to consent to such
Conversion and agrees to cause NewCo to implement the same in the event that
such funding Shareholder exercises its right under this Section 4.5. Such
funding Shareholder shall have the right to exercise its right to Conversion
under this Section 4.5 in addition to any other rights in favor of such funding
Shareholder in respect to the loan provided by such funding Shareholder, in its
sole discretion; provided, however, that to the extent that the right to
Conversion provided in this Section 4.5 is exercised by such funding
Shareholder, then the obligations owing from NewCo to such funding Shareholder
in relation to the loan provided by the funding Shareholder shall be reduced by
the amount so converted.

 

4.6           Preemptive Rights.

 

(a)           If the Board of Directors determines that additional
funding is necessary and authorizes the issuance of any new Shares, after
obtaining the approval of both Shareholders in accordance with Sections 2.2(b),
(c) and (d), NewCo shall offer to each Shareholder and each Shareholder may
elect, to subscribe to that number of new Shares, such that the Shareholder is
able to maintain the same percentage ownership (on a fully-diluted basis
including all outstanding options warrants, convertible securities, and other
capital stock of NewCo) of

 

 

the
outstanding Shares, which it possessed by virtue of its ownership of Shares
immediately prior to the issuance of the new Shares. The Shareholders will be
entitled to subscribe for the new Shares at the same price and upon the same
terms as such shares are being offered to any other Persons.

 

(u)           If any Shareholder does not elect to subscribe to the
full number of Shares it is entitled to subscribe to pursuant to Section
4.6(a), then the other Shareholder may purchase any new Shares that such
Shareholder elected not to subscribe to.

 

(v)           The per Share subscription price for any new Shares
issued by NewCo under this Section 4.6 shall be determined by the appraisal
method specified in Section 4.7, and the aggregate subscription price therefor
shall be paid by wire transfer of immediately available funds to the bank
account designated by NewCo, unless otherwise agreed in writing by such
subscribing Shareholders. If the price is not paid within thirty (30) days
after the offer, the offer shall be conclusively deemed to have been declined.

 

(w)          A Shareholder may not assign or otherwise transfer its
pre-emptive right to subscribe for new shares to another Person without the
prior written consent of the other Shareholder.

 

4.7           Appraisal Procedure.

 

(a)           For
matters for which this Agreement directs an appraisal pursuant to Section 4.7,
each of the Shareholders shall select one (1) person (an “Appraiser”)
with sufficient current experience to meet the standard of care for such
profession in appraising the valuation of companies similar to the NewCo. Each
Shareholder shall pay the fee of the Appraiser selected by such Shareholder. NewCo
and the Shareholders shall cooperate fully with the Appraisers, including
providing all information necessary or appropriate to such appraisal, requested
by either of the Appraisers. All information provided to one Appraiser shall be
provided to all Appraisers, NewCo and the Shareholders, subject to appropriate
confidentiality agreements.

 

(b)           Each
Appraiser shall provide to the Shareholder who retained such Appraiser, and
such Shareholder shall provide to NewCo and the other Shareholder within sixty
(60) days of the Appraisal Start Date, an appraised value of the Shares, which
value may not be in the form of a range of values but shall be a set price per
Share. If the higher appraised value of the Shares is less than one hundred
fifteen percent (115%) of the lower appraised value, the two appraised values
shall be averaged and the fair market value of the Shares shall be that
averaged value.

 

(c)           If
the higher appraised value of the Shares is greater than one hundred fifteen
percent (115%) of the lower appraised value, either Shareholder may request
that a third Appraiser be appointed by the two existing Appraisers, in lieu of
using an average of the appraisals of the first two Appraisers to set the share
price. The fee for the third Appraiser shall be paid equally by the
Shareholders, provided that such fee shall not exceed the average of the fee
paid to the two initial Appraisers, who shall cooperate fully with such third
Appraiser. If all three Appraisers agree on a valuation after consultation,
such agreed value shall be the fair market value of the Shares.

 

(d)           If
all three Appraisers cannot agree on a valuation after consultation, the third
Appraiser shall provide an independent valuation of the shares, which value may
not be in the form of a range of values but shall be a set price per share. Such
valuation shall be delivered to NewCo and each of the Shareholders within
ninety (90) days of the Appraisal Start Date. The fair market value of the
Shares shall be the average of all three appraisals, with the third Appraiser’s
finding weighted at twice the finding of the initial two Appraisers.

 

4.8           No Liens. Without the prior written consent of the
other Shareholder, no Shareholder shall pledge or otherwise subject its Shares
to any Liens. To the extent that the Shares held by either Shareholder shall
become subject to any Lien, such Shareholder shall immediately take all
necessary steps to eliminate such Lien.

 

 

SECTION 5

PROCEDURE IN THE EVENT OF DEADLOCK

 

5.1           Definition of Deadlock. This
Section 5 applies in any case where the two Shareholders disagree as to a
proposed resolution in relation to a matter listed in Section 2.2(d) that
either Shareholder believes is under the relevant circumstance essential to the
continuing operation of the Business, at the Shareholders meeting called in
relation thereto. Any such case is referred to as a “Deadlock”
and, for the purpose of this Section 5.1, the date on which the Deadlock arises
shall be the date on which the two Shareholders disagree on such resolution at
the relevant Shareholders meeting referred to in this Section 5.1

 

5.2           Senior Executive Resolution. In
any case of Deadlock, each of the Shareholders shall, within seven (7) days of
the date on which the Deadlock arises, cause its representatives, who may be
but need not be its appointees on the Board, to prepare and circulate to the
other Shareholder or Shareholders and other Directors a memorandum or other
form of statement setting out its position on the matter in dispute and its
reasons for adopting that position. Each memorandum or statement shall be
considered by senior directors or executives of each of the Shareholders to
which it is addressed who shall endeavour to resolve the Deadlock. If the
senior directors or executives of the Shareholders agree upon a resolution or
disposition of the matter, they shall execute a statement setting out the
agreed terms. The Shareholders shall exercise their respective voting rights
and other powers available to them in relation to NewCo to procure that the
terms agreed upon between the Shareholders are fully and promptly carried into
effect.

 

5.3           Mediation. If the Deadlock is
not resolved or disposed of in accordance with Section 5.2 within twenty-one
(21) days after expiration of the seven (7) day period, or such longer period
as the Shareholders agree in writing, the Shareholders shall, within seventy
two (72) hours, appoint an independent third-party mediator to attempt, for a
period of fourteen (14) days from the appointment of such mediator (the “Mediation Period”), to mediate an
agreement between the Shareholders to resolve the Deadlock. The Shareholders
shall each be responsible for one-half of all costs in relation to the
appointment of such mediator. In the event that the Shareholders are unable to
agree on the third party to be appointed as the mediator within seventy two
(72) hours, the Shareholders shall request that the International Chamber of
Commerce in Singapore recommend a mediator, and the Shareholders agree to
accept such recommendation. During the Mediation Period, the Shareholders shall
make their best efforts to co-operate with such mediator to resolve the
Deadlock. If a Deadlock cannot be resolved during the Mediation Period, the
Shareholders shall cause NewCo to be dissolved in accordance with laws of the
State of Delaware.

 

 

SECTION 6

INDEMNITY

 

6.1           Cytori’s Indemnification of
Olympus. Cytori shall indemnify, defend and hold harmless Olympus, and
Olympus’ Affiliates, directors, officers, employees, agents, successors and
assigns (“Olympus Indemnitees”) from and
against, and pay or reimburse each of them for and with respect to, any and all
Losses incurred or suffered by Olympus or Olympus Indemnitees, whether or not
resulting from third party claims, relating to, arising out of or resulting
from any breach by Cytori of any provision in this Agreement or the Ancillary
Agreements.

 

6.2           Olympus’s Indemnification. Olympus
shall indemnify, defend and hold harmless Cytori, Cytori’s Affiliates,
directors, officers, employees, agents, successors and assign (“Cytori Indemnitees”) from and
against, and pay or reimburse each of them for and with respect to, any and all
Losses incurred or suffered by Cytori or Cytori Indemnitees, whether or not
resulting from third party claims, relating to, arising out of or resulting
from any breach by Olympus of any provision in this Agreement or the Ancillary
Agreement.

 

6.3           Administration of Indemnification.
For purposes of administering the indemnification provisions set forth in
Sections 6.1 and 6.2, the following procedure shall apply:

 

(a)           Whenever
a claim (each, an “Indemnity Claim”)
shall arise for indemnification under this Section 6, the party entitled to
indemnification (the “Indemnified Party”)
shall, reasonably promptly after acquiring knowledge of the Indemnity Claim,
give written notice (each, an “Indemnity Claim Notice”)
to the party from
whom indemnification is sought (the “Indemnifying Party”)
setting forth in reasonable detail, to the extent then available, the facts
concerning the nature of the Indemnity Claim and the basis upon which the
Indemnified Party believes that it is entitled to indemnification under this
Section 6.

 

(b)           In
the event of any Indemnity Claim resulting from or in connection with any claim
by a third party, the Indemnifying Party shall be entitled, at its sole
expense, either (i) to participate in defending against such claim or (ii) to
assume the entire defense with counsel who is selected by it and who is
reasonably satisfactory to the Indemnified Party, provided that (i) the
Indemnifying Party agrees in writing that it does not and will not contest its
responsibility for indemnifying the Indemnified Party in respect of such claim
or proceeding, and (ii) no settlement shall be made and no judgment consented
to without the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld, conditioned or delayed (except that no such
consent shall be required if the claimant is entitled under the settlement to
only monetary damages actually paid by the Indemnifying Party). If, however, (I)
the claim, action, suit or proceeding would, if successful, result in the
imposition of damages for which the Indemnifying Party would not be
responsible, or (II) representation of both the Indemnified Party and
Indemnifying Party by the same counsel would otherwise be inappropriate due to
actual or potential differing interests between them, then the Indemnifying
Party shall not be entitled to assume the entire defense and each Party shall
be entitled to retain counsel who shall cooperate with one another in defending
against such claim. In the case of item (I) of the preceding sentence, the
Indemnifying Party shall be obligated to bear only that portion of the expense
of the Indemnified Party’s counsel that is in proportion to the claimed damages
indemnifiable by the Indemnifying Party compared to the total amount of the
third-party claim against the Indemnified Party.

 

(c)           If,
within ten (10) days after receipt of an Indemnity Claim Notice, the
Indemnifying Party fails to give the Indemnified Party written notice of the
Indemnifying Party’s election to undertake the defense of the related Indemnity
Claim, or if the Indemnifying Party subsequently fails to diligently prosecute
such defense, the Indemnified Party may defend in such manner as it reasonably
deems appropriate or settle the claim (after giving notice thereof to the
Indemnifying Party) on such terms as the Indemnified Party may deem
appropriate, and the Indemnified Party shall be entitled to periodic

 

 

reimbursement
of defense expenses incurred and prompt indemnification from the Indemnifying
Party in accordance with this Section 6.

 

(d)           Failure or delay by an Indemnified
Party to give a reasonably prompt notice of any Indemnity Claim (if given prior
to expiration of the applicable Survival Period) shall not release, waive or
otherwise affect an Indemnifying Party’s obligations with respect to the
Indemnity Claim, except to the extent that the Indemnifying Party can
demonstrate actual Loss or prejudice as a result of such failure or delay.

 

SECTION 7

COVENANTS OF
CYTORI

 

7.1           Patent Applications. Cytori
shall provide Olympus with copies of all correspondence between Cytori and
relevant patent offices regarding the Patent Applications, and in Cytori’s
discretion, shall provide such additional information concerning such Patent
Applications as Olympus may reasonably request.

 

SECTION 8

DEFAULT AND TERMINATION

 

8.1           Term. This Agreement shall be effective as of the
Effective Date and shall remain in full force and effect indefinitely unless
pursuant to Section 8.2 and 8.3.

 

8.2           Events of Default. The following constitute events of default (“Default Events”):

 

(a)           material breach of any
representation, warranty, covenant or agreement in this Agreement or the Ancillary Agreements by Olympus that is not cured within sixty (60)
days of receipt of written notice of such breach;

 

(b)           material breach of any representation, warranty,
covenant or agreement in this Agreement or the Ancillary Agreements by Cytori that is
not cured within sixty (60) days of receipt of written notice of such breach;

 

(c)           Bankruptcy
and Equity Exception of Olympus;

 

(d)           Bankruptcy
and Equity Exception of Cytori;

 

(e)           Failure to resolve Deadlock within the Mediation
Period;

 

(f)            Change
of Control (of Olympus); and

 

(g)           Change
of Control (of Cytori).

 

8.3           Rights Upon Default.

 

(a)           Upon an Event of Default described in Sections 8.2 (a) and (b), this Agreement shall
terminate and the Shareholder not subject to the Default Event (“Non-Defaulting Party”), shall, in
addition to any other rights or remedies available to such party pursuant to
this Agreement or at Law or in equity, have the right to (i) put its Shares to
the Shareholder that is subject to the Default Event (“Defaulting
Party”), or (ii) call the Shares

 

 

of the
Defaulting Party at the fair market value thereof as determined in accordance
with Section 4.7 by the Accountants, exercisable by sending a written notice to the
Defaulting Party within sixty (60) days after the occurrence of the Default
Event.

 

(b)           Upon an Event of Default described in Sections 8.2 (d) and (g), this Agreement shall terminate and Olympus (as the
Non-Defaulting Party),
shall, in addition to any other rights or remedies available to such party
pursuant to this Agreement or at Law or in equity, have the right to (i) put its
Shares to Cytori (as the Defaulting Party) at the per Share purchase price at which
Olympus acquired its Share for the price of  
***  Dollars (US$ ***) or the fair market value thereof as
determined in accordance with Section 4.7 by the Accountants, whichever comes higher, or (ii) call the Shares of Cytori at the fair market value thereof as determined
in accordance with Section 4.7 by the Accountants which become higher, exercisable by sending a written notice
to Cytori within
sixty (60) days after the occurrence of the Default Event.

 

(c)           Upon an Event of Default described in Sections 8.2 (c) and (f), this Agreement shall terminate and Cytori (as the
Non-Defaulting Party), shall,
in addition to any other rights or remedies available to such party pursuant to
this Agreement or at Law or in equity, have the right to (i) terminate any
and all license granted to Olympus and/or NewCo under the Ancillary Agreements, or (ii) call the Shares of Olympus at the fair market value thereof as determined
in accordance with Section 4.7 by the Accountants, exercisable by sending a written notice to Olympus within sixty (60) days after the
occurrence of the Default Event.

 

(d)           If the Non-Defaulting Party exercises its put right
under Section 8.3(a) and (b), such Non-Defaulting Party shall sell and the
Defaulting Party shall purchase all Shares owned by the Non-Defaulting Party
within sixty (60) days from the date on which the Defaulting Party receives
written notice from the Non-Defaulting Party of its exercise of its put right
under Section 8.3(a) and (b).

 

(e)           If the Non-Defaulting Party exercises its call right
under Section 8.3(a), (b) and (c), such Non-Defaulting Party shall purchase and the
Defaulting Party shall sell all Shares owned by the Defaulting Party within sixty
(60) days from the date on which the fair market value of such Shares have been
determined in accordance with the provisions of Section 4.7.

 

(f)            The transfer of Shares under Section 8.3(d) and (e) shall be consummated by payment of the
relevant Share purchase price by wire transfer of immediately available funds
to the bank account designated by the transferring Shareholder against delivery of the
relevant Share by the transferring Shareholder.

 

Upon an Event of Default
described in Sections 8.2(e), the
Shareholders shall meet with a view to discussing whether or not to continue
NewCo. If the Shareholders are unable to reach an agreement within ninety (90)
days after commencement of such discussions, then this Agreement shall
terminate and the Shareholders shall dissolve and liquidate NewCo in accordance
with laws of the State of Delaware.

 

8.4           Dissolution and Liquidation of
NewCo. If NewCo is to be
dissolved and liquidated under 8.3(g) above, the
Shareholders agree that Olympus shall have the sole option to either: (i) elect
to terminate all licenses granted to NewCo by either party, in addition to the
termination of all of Joint Venture Agreement and the Ancillary Agreements and
distribute all other assets of NewCo equally between the parties, or (ii)  elect to (a)
receive to for its own account the licenses granted by Cytori to NewCo under
the License/ Commercial Agreement, and any NewCo IP,  and assume all of the rights and responsibilities
of NewCo under the License/Commercial Agreement, and (b) assume NewCo’s rights
and responsibilities under the Joint Development Agreement,  and (c) distribute all other proceeds of such liquidation (excluding items
(a) and (b) of this Section 8.4) and distribute such among the parties in
accordance with applicable Law. For avoidance of
any doubt, in no event shall Olympus be obligated to exercise

 

*** Material has been omitted pursuant to a
request for confidential treatment filed separately with the Securities and
Exchange Commission.

 

 

any of option under this Section
8.4.

 

SECTION 9.         Limitation of Liability

 

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN
NO EVENT SHALL ANY PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY NATURE (INCLUDING,
BUT NOT LIMITED TO, DAMAGES FOR LOSS OF BUSINESS, LOSS OF PROFIT OR REVENUES,
LOSS OF USE OF THE PRODUCTS OR ANY ASSOCIATED EQUIPMENT, COST OF CAPITAL, COST
OF SUBSTITUTE PRODUCTS, FACILITIES OR SERVICE, DOWNTIME, PERSONAL PROFITS,
BUSINESS INTERRUPTION, OR ANY OTHER PECUNIARY LOSS) ARISING OUT OF OR IN ANY
WAY RELATED TO THE PARTIES’ PERFORMANCE OR FAILURE TO PERFORM UNDER THIS
AGREEMENT, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT
(INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE, EVEN IF THE OTHER
PARTY HAS BEEN WARNED OF THE POSSIBILITY OF SUCH DAMAGES.  EXCEPT TO THE
EXTENT SPECIFICALLY PROVIDED OTHERWISE IN THIS AGREEMENT, ALL REMEDIES PROVIDED
FOR HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO TERMINATE THIS
AGREEMENT AND ALL OF THE REMEDIES PROVIDED BY LAW (AND NOT EXCLUDED PURSUANT TO
THE FOREGOING SENTENCE), SHALL BE DEEMED CUMULATIVE AND NON EXCLUSIVE.

 

SECTION 10

MISCELLANEOUS

 

10.1         Expenses.
Except as otherwise expressly provided in
this Agreement, each of the parties shall bear its own expenses, including the
fees of any attorneys and accountants engaged by such party, in connection with
the transactions contemplated by this Agreement.

 

10.2         Notices.
Except as may be otherwise provided herein, all notices, requests, waivers and
other communications made pursuant to this Agreement shall be in writing and
shall be conclusively deemed to have been duly given (a) when hand delivered to
the other Party; (b) when received, if sent by facsimile at the address and
number set forth below, with a written confirmation copy of such facsimile
sent the next business day in accordance with (c) below; (c) the second business day after deposit
with a national overnight delivery service, postage prepaid, addressed to the other
Party as set forth below, provided that the sending Party receives a
confirmation of delivery from the delivery service provider; or (d) if earlier,
when actually received.

 

	
  To Cytori:

  	
   

  	
  To Olympus:

  
	
   

  	
   

  	
   

  
	
  3020 Callan Road, San Diego, CA 92121, U.S.A

  	
   

  	
  2-3 Kuboyama-cho, 

  
	
   

  	
   

  	
  Hachioji-shi, Tokyo, 192-8512, Japan

  
	
  Attn: Christopher J. Calhoun

  	
   

  	
   

  
	
  Fax: 858-458-0995

  	
   

  	
  Attn: Yasunobu Toyoshima

  
	
   

  	
   

  	
  Fax: +81-426-91-7350

  
	
   

  	
   

  	
   

  
	
  To NewCo:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3020 Callan Road, San Diego, CA 92121, U.S.A

  	
   

  	
  2-3
  Kuboyama-cho,

  
	
   

  	
   

  	
  Hachioji-shi, Tokyo, 192-8512, Japan

  
	
  Attn: Christopher J. Calhoun

  	
   

  	
   

  
	
  Fax: 858-458-0995

  	
   

  	
  Attn: Terada Masaaki

  
	
   

  	
   

  	
  Fax: +81-426-91-7350

  

 

 

A party hereto may change or supplement its address set forth above, or
may designate additional addresses, for purposes of this Section 10.2, by giving the other parties hereto
written notice of the new address in the manner set forth above.

 

10.3         Amendments
and Waivers. No term or provision of this Agreement may be amended, waived,
discharged or terminated orally but only by an instrument in writing signed by
the party against whom the enforcement of such amendment, waiver, discharge or
termination is sought. Provided however, that the
approval by Olympus shall only be deemed to have been given upon delivery of
Olympus in writing that is duly signed by the then current president. Any waiver shall be effective only in
accordance with its express terms and conditions.

 

10.4         Entire
Agreement. This Agreement,
including the Attachments, Schedules and Exhibits hereto and the Ancillary
Agreements contemplated by the JVA, all of which are hereby
expressly incorporated herein by this reference, together with the
Confidentiality Agreement, constitutes the entire
understanding and agreement among the parties with respect to the subject matter
hereof, and supersedes in its entirety all prior agreements and understandings,
express or implied, oral or written among them with respect thereto. No
alteration, modification, interpretation or amendment of this Agreement shall
be binding on the parties unless in writing designated as an amendment hereto,
and executed with equal formality by each of the parties.

 

10.5         Binding
Effect. Except as otherwise
provided in this Agreement, the terms and provisions of this Agreement shall
inure to the benefit of and be binding upon the parties and their respective
successors or permitted assigns, and nothing in this Agreement, express or
implied, shall confer on any Person, other than the parties to this Agreement
and their respective successors or permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

 

10.6         Interpretation.
The titles of the Articles and Sections have
been included as a matter of convenience and shall not control or affect the
meaning or interpretation of any of the terms or provisions hereof.

 

10.7         Severability.
Any provision of this Agreement that is unenforceable under applicable Laws
shall be ineffective to the extent of such unenforceability without
invalidating the remaining provisions of this Agreement. To the extent
permitted by applicable Laws, the parties waive any current or future provision
of Laws which renders any provision of this Agreement unenforceable in any
respect. The parties agree that any unenforceable provision shall be construed
or reformed so as to enforceably effectuate, to the maximum possible extent,
the parties’ expressed intent.

 

10.8         Counterparts.
This Agreement shall
be executed in three (3) counterparts, by original or facsimile signature, each
of which shall be deemed to be an original, and all such counterparts together
shall constitute one and the same legal document.

 

10.9         Languages.
This Agreement and
any amendments, waivers or other modifications hereof shall be executed in the
English language. In the event of a conflict between the English and any other
language versions of this Agreement, the English language version shall
prevail.

 

10.10       Governing
Law and Dispute Resolution. This Agreement shall in all respects be
governed by and construed in accordance with the laws of New York without
reference to principles of conflicts of laws that would require the application
of the Laws of another jurisdiction. All disputes arising out of or in
connection with this Agreement, or any relationship created by or in accordance
with this Agreement, shall be finally settled under the Rules of Arbitration of
the International Chamber of Commerce (the “Rules”)
by three arbitrators. Judgment on the award rendered by the panel of
arbitrators shall be binding upon the Parties and may be entered in any court
having

 

 

jurisdiction thereof. Olympus shall nominate one
arbitrator and Cytori shall nominate one arbitrator. The arbitrators so
nominated by each Shareholder respectively shall jointly nominate the third
arbitrator within fifteen (15) days following the confirmation of arbitrators
nominated by each Shareholder. If the arbitrators nominated by each respective
Shareholder cannot agree on the third arbitrator, then such third arbitrator
shall be selected as provided in the Rules. The place of the arbitration and
all hearings and meetings shall be Singapore. unless the parties to the
arbitration otherwise agree. In addition to the Rules and except as otherwise
provided herein, the parties agree that the arbitration shall be conducted
according to the International Bar Association Rules on the Taking of Evidence
in International Commercial Arbitration. The arbitrators may order pre-hearing
production or exchange of documentary evidence, and may require written
submissions from the relevant parties hereto, but may not otherwise order
pre-hearing depositions or discovery. The arbitrators shall apply the laws of
New York as set forth in this 10.10. The language of the arbitral proceedings shall be
English. The arbitrators shall not issue any award, grant any relief or take
any action that is prohibited by or inconsistent with the provisions of this
Agreement.

 

No arbitration pursuant to this Section 10.10 shall be commenced until the party
intending to request arbitration has first given thirty (30) days written
notice of its intent to the other parties and has offered to meet and confer
with one or more responsible executives of such other parties in an effort to
resolve the dispute(s) described in detail in such written notice. If one or
more responsible executives agree, within thirty (30) days after receipt of
such written notice, to meet and confer with the requesting party, then no
arbitration shall be commenced until such parties have met and conferred in an
effort to resolve the dispute(s) or until sixty (60) days have elapsed from the
date such written notice has been given.

 

IN WITNESS WHEREOF, the parties
hereto have, by their duly authorized representatives, caused this Shareholders
Agreement to be executed as of the Effective Date.

 

	
  Cytori

  
	
  Cytori Therapeutics,
  Inc.

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Christopher J.
  Calhoun

  	
   

  
	
  Name: Christopher J.
  Calhoun

  
	
  Title: CEO

  
	
   

  
	
   

  
	
  Olympus

  
	
  Olympus Corporation

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Tsuyoshi Kikukawa

  	
   

  
	
  Name: Tsuyoshi Kikukawa

  
	
  Title: President

  
					

 

 

LIST OF ATTACHMENTS

 

Attachment 1:       Definitions

Attachment 2:       Initial
Business Plan

 

LIST OF SCHEDULES

 

	
  Schedule 1:

  	
   

  	
   

  	
  By-laws

  
	
  Schedule 2.3(a):

  	
   

  	
  List of Initial Directors

  
	
  Schedule 2.4(a):

  	
   

  	
  List of Initial Officers

  
	
  Schedule 3:

  	
   

  	
   

  	
  Certificate of Incorporation

  
	
  Schedule 3.1:

  	
   

  	
  Initial Annual Business Plan

  

 

 

ATTACHMENT 1

DEFINITIONS

 

“Affiliate” shall mean, as to
any party to this Agreement, any Person that, directly or indirectly, controls,
or is controlled by, or is under common control with, such party, where “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) means (a) the beneficial ownership of fifty percent (50%) or
more of the outstanding voting securities of such party, or (b) the possession,
directly or indirectly, of the power to direct or cause the direction of
management or policies of such party, whether through the ownership of
securities or partnership or other ownership interests, by contract or
otherwise.

 

“Agreement” shall have the
meaning set forth in the Preamble.

 

“Ancillary Agreements”
shall mean the License/ Joint Development Agreement, the Shareholders
Agreement, the License/ Commercial Agreement, the Three-Way NDA, the Olympus
Share Subscription Agreement, and the NewCo Share Subscription Agreement; provided, however, where the context herein
would provide that NewCo is a party to the Ancillary Agreements, such usage of
the term “Ancillary Agreements” shall be understood to exclude the Shareholders
Agreement.

 

“Annual Business Plan” shall
mean the business plan of NewCo for each fiscal year of NewCo, as determined
and adopted by NewCo in accordance with Section 3.1.

 

“Appraiser” shall have the
meaning set forth in Section 4.7(a).

 

“Bankruptcy and Equity Exception”
means the extent to which enforceability of this Agreement (a) may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general application affecting or relating to the
enforcement of creditors’ rights generally and (b) is subject to general principles
of equity, whether considered in a proceeding at law of in equity.

 

“Board of Directors” shall have
the meaning set forth in Section 2.3(a).

 

“Business” shall mean the
development, modification, service, maintenance, manufacturing and sales of Licensed
Products in the Licensed Field.

 

“By-Laws” shall mean the
by-laws of NewCo attached hereto as Schedule 1, as may be amended from
time to time.

 

“Certificate of Incorporation”
shall mean the certificate of incorporation of NewCo attached hereto as Schedule
3, as it may be amended from time to time.

 

“Chairman” shall have the
meaning set forth in Section 2.3(e).

 

“Change of Control (of Cytori)”
shall mean an event in which (a) a Person, whether directly or indirectly
through one or more intermediaries, becomes the owner or holder of fifty one
percent (51%) or more of the voting power of Cytori, or such other shareholding
in Cytori to as to enable such Person to direct or cause the direction of
management or policies of Cytori, or (b) Neither Mr. Christopher Calhoun nor
Mr. Marc Hedrick have a significant management role in Cytori.

 

“Change of Control (of Olympus)”
shall mean an event in which (a) a Person, whether directly or indirectly
through one or more intermediaries, becomes the owner or holder of fifty one
percent (51%) or more of the voting power of Olympus, or such other
shareholding in Olympus to as to enable such Person to direct or cause the
direction of management or policies of Olympus.

 

“Confidentiality Agreement”
shall have the meaning set forth in the Recitals.

 

“Conversion” shall have the
meaning set forth in Section 4.5.

 

“Cytori” shall have the meaning
set forth in the Preamble.

 

“Cytori Directors” shall have
the meaning set forth in Section 2.3(a).

 

“Cytori Indemnitees” shall have
the meaning set forth in Section 6.2.

 

“Deadlock” shall have the
meaning set forth in Section 5.1.

 

“Directors” shall have the
meaning set forth in Section 2.3(a).

 

 

“Effective Date” shall have the
meaning set forth in the Preamble.

 

“Governmental Authority” shall
mean any government, court, arbitrator, regulatory or administrative agency,
commission or authority or other governmental instrumentality, federal, state
or local, domestic, foreign or multinational, including, without limitation,
the European Union and the departments, agencies, commissions and other bodies
thereof.

 

“Indemnified Party” shall have
the meaning set forth in Section 6.3(a).

 

“Indemnifying Party” shall have
the meaning set forth in Section 6.3(a).

 

“Indemnity Claim” shall have
the meaning set forth in Section 6.3(a).

 

“Indemnity Claim Notice” shall
have the meaning set forth in Section 6.3(a).

 

“Initial Business Plan” shall
have the meaning set forth in Section 3.1.

 

“JVA” shall have the meaning
set forth in the Recitals.

 

“Law(s)” shall mean all laws of
any jurisdiction (whether local, state, provincial, regional, national, foreign
or otherwise) (including common law and civil law), statutes, ordinances,
codes, rules, regulations, decrees and orders of Governmental Authorities.

 

“Liability” shall mean, as to
any party to this Agreement, any debt, adverse claim, liability, obligation or
commitment of such party of any kind or nature, whether direct or indirect,
fixed, absolute or contingent, determined or determinable, matured or
unmatured, accrued or unaccrued, liquidated or unliquidated, due or to become
due, asserted or unasserted, or known or unknown, and regardless of whether
arising out of or based upon contract, tort, strict liability, statute or
otherwise or whether required by US GAAP to be reflected as a liability on such
party’s balance sheet or disclosed in the related notes.

 

“License/ Commercial Agreement”
shall mean the License/ Commercial Agreement dated [           ]
entered into by and between NewCo and Cytori.

 

“License/ Joint Development Agreement”
shall mean the License/ Joint Development Agreement dated [           ]
entered into by and among Cytori, NewCo and Olympus.

 

“Licensed Field” shall mean the use of the Licensed IP for the purpose of designing, developing, manufacturing, testing and servicing Licensed Products, and
selling Licensed Products exclusively to Cytori.

 

“Licensed IP”
shall mean all Intellectual Property Rights owned or controlled by either Party which are
necessary or useful to design, develop, manufacture, test, analyze, market,
offer to sell to Cytori, sell to Cytori and service all current and future
generations of the Licensed Product(s). The term “Licensed IP” shall include
all Intellectual Property Rights licensed to NewCo by Cytori and by Olympus,
whether pursuant to this Agreement, any Ancillary Agreement or otherwise.

 

“Licensed Product(s)” shall
mean any
automated devices (and related component parts) that           ***           separate
and concentrate           ***           cells
(including stem cells and other regenerative cells) from harvested adipose
tissue (fat tissue). The device components include, but are not limited to,                      ***

	
   

  	
  ***

  
	
   

  	
  ***.

  

 

“Liens” shall mean all liens,
pledges, charges, mortgages, deeds of trust, pledges, hypothecations, title
defects, restrictions, conditions, easements, claims, options, leases, rights
of possession or use, encumbrances, adverse rights or claims and security
interests of any kind or nature whatsoever (including any restriction on the
right to vote or transfer), whether voluntarily incurred or arising by
operation of Law or otherwise, including, without limitation, any written or
oral agreement to give or grant any of the foregoing.

 

“Loss” shall mean any claim,
demand, Liability, loss, damage, deficiency, assessment, judgment, settlement,
remediation and costs or expenses (including reasonable attorney, consultant
and expert fees and expenses).

 

“Mediation Period” shall have
the meaning set forth in Section 5.3.

 

*** Material has been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.

 

 

“NewCo” shall have the meaning
set forth in the Preamble.

 

“Offer” shall have the meaning
set forth in Section 4.2(c).

 

“Offered Shares” shall have the
meaning set forth in Section 4.2(c).

 

“Offeree Shareholder” shall
have the meaning set forth in Section 4.2(c).

 

“Olympus” shall have the
meaning set forth in the Preamble.

 

“Olympus Directors” shall have
the meaning set forth in Section 2.3(a).

 

“Olympus Indemnitees” shall
have the meaning set forth in Section 6.1.

 

“Olympus
Share Subscription Agreement” shall mean the Share Subscription
Agreement to be entered into by and between Olympus and NewCo concurrently with
the License/ Joint Development Agreement.

 

“Permitted Transfers”
shall have the meaning set forth in Section 4.2(b).

 

“Permitted Transferee”
shall have the meaning set forth in Section 4.2(b).

 

“Person” shall mean an
individual, a corporation, a limited liability company, a partnership, a joint
venture, an association, a trust or any other entity, including a Governmental
Authority, other than a party to this Agreement.

 

“Rules” shall have the meaning
set forth in Section 9.10.

 

“Shareholders” shall mean
Cytori and Olympus.

 

“Shares” shall mean shares of
capital stock issued by NewCo.

 

“Terms” shall have the meaning
set forth in Section 4.2(c).

 

“Three-Way NDA”
shall mean the Three-Way Non-Disclosure Agreement, dated [                 ],
entered into by and among Cytori, Olympus and NewCo.

 

“Threshold Percentage” shall
have the meaning set forth in Section 2.3(a).

 

“Transfer Price” shall have the
meaning set forth in Section 4.2(c).

 

“Transferee” shall have the
meaning set forth in Section 4.2(c).

 

“Transferor” shall have the meaning
set forth in Section 4.2(c).

 

“US GAAP” shall mean United
States generally accepted accounting principles.

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